Volume Spike Investor

It has been a while since have seen XM Satellite Radio Inc. (NASDAQ: XMSR) as a leader in CBOE options trading volume.  But this morning we have seen an increased activity out to OCTOBER 2008.  In the OCT08 $9.00 CALLS we have seen 12,415 contracts trade hands as of 11:10 AM EST and the open interest before today was 12,750.  While there are other active contracts in various months and strike prices in both PUTS and CALLS, this is by far the most active of the XM contracts today.

XM’s underlying stock is actually down 1.5% at $8.49 on only 1.3 million shares.  It trades on average about 5.5 million shares per day.  As a reminder, 12,000 contracts is representative of 1.2 million shares on a fully leveraged basis.

It seems someone must be expecting a rapid approval of the Sirius Satellite Radio Inc. (NASDAQ: SIRI) merger or another positive development.

Jon C. Ogg
July 17, 2008