Amazon Buzz Fuels Heavy Sinclair Broadcast Options Trading

Wall Street is wondering if SBGI's recent purchase could lead to an Amazon partnership

May 6, 2019 at 2:09 PM
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Sinclair Broadcast Group Inc (NASDAQ:SBGI) stock has spiked 29% higher today to trade at $58.02, after the media giant's CEO Chris Ripley said SBGI has "an interest in as broad a distribution as possible" following its purchase of some of Walt Disney's (DIS) sports assets -- including a potential live sports partnership with Amazon.com (AMZN). The equity is fresh off a record high of $59.39, and options traders are piling on.

At last check, 2,381 puts and 1,697 calls have changed hands on SBGI -- nearly seven times the average intraday amount, and total options volume pacing in the 96th annual percentile. It looks like put writers may be selling to open the May 50 strike, expecting the stock to hold above the half-century mark through the close on Friday, May 17.

Elsewhere on Wall Street, a number of shorts covered their bets just in time, with short interest down 28% in the two most recent reporting periods. However, there are still 3.26 millions SBGI shares sold short, representing a healthy 5.2% of the equity's available float, or 2.9 times the average daily pace of trading.

Looking closer at the charts, Sinclair Broadcast stock rallied hard off its late December lows near $25, but recently stalled near the $46 level. The shares have sliced through this short-term ceiling with today's gap, pacing for their best day since Aug. 21, 2009, when they surged 32.6%.

 

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