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