Bulls Busy as M&A Talk Buoys CommScope Holding Company, Inc (COMM)

Commscope Holding Company Inc (COMM) calls are flying off the shelves

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Published on Jan 27, 2015 at 3:44 PM
Updated on Jun 24, 2020 at 10:16 AM

Commscope Holding Company Inc (NASDAQ:COMM) has added 15.7% today to trade at $25.00, on reports that it could be buying TE Connectivity Ltd's (NYSE:TEL) network equipment business (subscription required). In response, options bulls have rushed to the scene, with call activity at 89 times the normal pace.

Speculators' favorite strike today by a mile is the February 25 call, where over 3,800 contracts have crossed the tape. It appears most of these contracts were bought to open, suggesting traders are hoping for COMM to finish above $25 by the close on Friday, Feb. 20, when the contracts expire.

Call buying has dominated COMM's options pits recently, as well. In fact, in the past 10 weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open more than 17 calls for each put. The resultant call/put volume ratio of 17.30 is higher than 94% of all similar readings in the past year.

Technically speaking, Commscope Holding Company Inc (NASDAQ:COMM) has been trying to recover since hitting a mid-October low of $19.68. Today's call buyers may be hoping that a solid earnings report -- which is tentatively scheduled for release in mid-to-late February, possibly ahead of expiration -- will boost the shares safely above the quarter-century mark.


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