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Sirius XM Holdings Inc (SIRI) Call Volume Surges on Big Trade

Today saw the initiation of a long call calendar spread on Sirius XM Holdings Inc

by 1/8/2014 3:30 PM
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Sirius XM Holdings Inc (NASDAQ:SIRI) calls are trading at an eight-fold mark-up to the average intraday clip, with more than 138,000 contracts on the tape so far. A large portion of the activity centers on a pair of strikes -- namely, the February 4 call and June 4 call -- where two matching blocks totaling nearly 100,000 contracts traded earlier this afternoon.

The 49,871-lot traded at the February 4 call changed hands below the bid price, and volume outstripped current open interest levels, suggesting sell-to-open activity. Meanwhile, the 49,871-lot traded at the June 4 call crossed off the ask, and volume also surpassed open interest, indicating buy-to-open activity. In short -- and as Trade-Alert indicates -- we have the initiation of an apparent long call calendar spread.

The popularity of calls in SIRI's options pits today is nothing new. During the past 10 weeks, the streaming radio provider has racked up a call/put volume ratio of 4.23 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). In other words, in the previous 50 sessions, more than four calls have been bought to open for each put. This ratio ranks in the 64th percentile of its annual range, meaning calls (relative to puts) have been scooped up at a faster-than-usual pace.

On the fundamental front, Sirius XM Holdings Inc (NASDAQ:SIRI) reported some positive news yesterday. Specifically, the company said it added 1.66 million subscribers last year, besting the company's forecast of 1.6 million new listeners. At last check, SIRI shares were 1.4% lower to trade at $3.81.


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