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June 04, 2006

Unusual Options Activity in NTL

I am not sure what to make of this but last week two separate reports surfaced about heavy buying of NTL call options. Here is the comment that appeared on StreetInsight.com:

U.K. based media company NTL Holdings (NTLI-$27) is trading almost 8 times its average daily call option volume today, with over 9,000 contracts changing hands vs. an average of only 1,100. The July 25 and 27.5 calls are where all the volume is. It is worth noting that the July 27.5 calls have traded 6,000 contracts today with only 690 outstanding. The year high for NTLI is $31 and by the look of today's option activity it seems a push to that level expected.

I certainly hope the projection for a move to $31 is correct. Maybe some Monday news stories will shed light on what the buyer thinks they know. Regardless, NTL shares remain attractive and hopefully will begin to respond over the summer as the company starts to report earnings that show the cost synergies of the Telewest merger. As we wait, there is always the possibility that stories of private equity interest in NTLI will emerge. I think the prior stories, written earlier this year, were accurate.

Posted by Steve Birenberg at June 4, 2006 03:19 PM in NTLI