Options Intelligence Report: MetroPCS Communications, Inc. (PCS) & Time Warner Cable Inc. (TWC)

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PCS ñ MetroPCS Communications, Inc.
Shares of the pay-as-you-go mobile phone firm are trading 10.20% higher at $8.53 as of 11:30 am (ET), and earlier surged 17.20% to touch an intraday high of $9.07. MetroPCS shares jumped after the U.S. company posted first-quarter earnings of $0.06 a share and revealed first-quarter subscriber gains and first-quarter sales which exceeded analystsí expectations.

Bullish investors are positioning for continued share price appreciation by purchasing at least 4,700 August $9.0 strike calls options for an average premium of $0.88 per contract. Call-buyers make money as long shares of the underlying stock rally above the average breakeven point to the upside at $9.88 ahead of expiration day in August. The overall reading of options implied volatility on the stock collapsed 21.7% lower to 54.25% following earnings released before the opening bell.

 


TWC ñ Time Warner Cable Inc.
Investors who purchased put options on Time Warner Cable Inc. a couple of days ago are reaping the benefits today with shares of the stock trading 5.90% lower at $51.75 as of 11:40 am (ET). It looks like bearish traders picked up approximately 2,300 puts at the June $55 strike for an average premium of $1.97 apiece on Tuesday April 4, 2010, when TWC shares were trading at a volume-weighted average price of $56.08.

The cable operatorís shares have since tumbled approximately 7.7% down to the current price of $51.75. The share price erosion over the past 48 hours significantly inflated premium on the now deep-in-the-money put contracts at the June $55 strike price. Thus, individuals holding the puts sold the contracts today for an average premium of $3.72 apiece to take in average net profits of $1.75 per contract. Options implied volatility on Time Warner Cable is up 12.1% to 35.89% just ahead of 12:00 pm (ET).

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This material is not intended as an offer or solicitation for thepurchase or sale of any security or other financial instrument.Securities or other financial instruments mentioned in this materialare not suitable for all investors. Any opinions expressed herein aregiven in good faith, are subject to change without notice, and are onlycorrect as of the stated date of their issue. The information containedherein does not constitute advice on the tax consequences of making anyparticular investment decision. This material does not take intoaccount your particular investment objectives, financial situations orneeds and is not intended as a recommendation to you of any particularsecurities, financial instruments or strategies. Before investing, youshould consider whether it is suitable for your particularcircumstances and, as necessary, seek professional advice.


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