Wednesday, May 23, 2007

IGT Options Activity

There might be some inkling of truth to the recent International Game Technology (IGT) buyout rumors. It has been about a week since they surfaced publicly, and options activity is still a bit unusual.

IGT is at 41.50 as I type. Open Interest in the June 45's is 11,049 contracts, and today's volume sits at 3,836. These contracts are going for roughly 0.60, so these options break-even if IGT moves 10% in the next 3 1/2 weeks.

Contrast this to First Marblehead (FMD) options activity. There was recent M&A talk regarding FMD also. Today's volume in the June 40's is 60 contracts with Open Interest of 4,019 contracts.

Just an observation. I don't claim to know anything more, but it's interesting to see if a deal happens, because the options activity is definitely not normal.

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