Paper bought 4,227 ORCL Jan 31 Calls for $2.13 (3.1 times usual volume) with stock at $30.43
Paper bought 20,000 CLWR SEP 3.5 Calls for $1.60 (2.3 times usual volume) with stock at $5.05
Paper bought 4,384 PSX Nov 67.5 Calls for $2.10 (5 times usual volume) with stock at $58.89
Paper bought 2,752 HTZ Jul 24 Calls for $0.90 (4.7 times usual volume) with stock at $23.60
Paper bought 1,704 ABV Jan 46 Calls for $0.35 (3.2 times usual volume) with stock at $34.02

 Sprint’s newest offer has been a struggle for Dish because of the support that the potential deal has garnered from investors that they previously did not have. Clearwire shares have been on the rise this year and are up 75%. The reason behind Clearwire’s rising stock has been in part due to the bidding war that has been going on for the company. If Sprint were able to acquire Clearwire they hope to improve its high-speed data network and wireless service. On the other hand, Dish was hoping to get into the cellular service market and expand it business from just satellite television through the Clearwire bid. All of this comes at a time when Dish was not only looking to acquire Clearwire, but also looking to buy Sprint. However, it was announced that Dish has officially given up the acquisition of Sprint and it will not offer any new bids for the company. The company SoftBank, which is located in Japan, offered a bid at $21.6 billion for a large stake in Sprint. After the offer was announced Dish has decided not to counter bid and will look to stop their efforts to buy Sprint. 

Earlier this month, SPRD stock shares spiked to prices well above those from the past three months “due to the continuing strong demand throughout the quarter for low-cost smartphones,” as quoted by CEO Leo Li, in addition to optimistic revenue guidance reports for Q2 according to other SPRD officials. It predicts at most $270-278 million in revenue (a Q1 / Q2 increase of about 42.9% to 47.1%) which is significantly higher than its previous guidance reports which were around $220-$228 million.

Though SPRD previously operated in the TD-SCDMA Chinese air-interface market, it is now making new ventures into the W-CMDA, an alternative 3G air-interface network. SPRD estimates 800 million units in the W-CMDA network by 2014 and nearly 1 billion units by 2015 due to growth from other newly emerging markets, ensuring plenty of potential gain in this networking avenue.

SPRD’s prices rose nearly $2.00 from yesterday within a matter of minutes with today’s top price at $26.53 taking its place as the high for the week. So far today’s growth has been well-stabilized and relatively high.   

SPRD’s optimistic estimates on Q2 revenue, outreach into new markets, stable gross margins, and investments in future technologies give it a bullish outlook for investors and is sure to succeed with these propitious signifiers.

Paper bought 3,000 HYG Jul 95 Calls for $0.10 (2.4 times usual volume) with stock at $91.10
Paper bought 12,600 SLV Jul 20 Calls for (2 times usual volume) with stock at $19.14
Paper bought 10,000 GOL Jan 4 Calls for $0.65 (6.6 times usual volume) with stock at $3.37
Paper bought 700 LPS Jul 33 Calls for $0.25 (8.2 times usual volume) with stock at $31.71

Paper bought 8,804 TIF Nov 67.5 Puts for $3.10 (3.9 times usual volume) with stock at $72.89
Paper bought 75,000 XLB Jul 34 Puts for $0.15 (9.1 times usual volume) with stock at $39.67
Paper bought 30,000 FXI Sep 29.5 Puts for $0.84 (2.1 times usual volume) with stock at $32.83
Paper bought 2,000 EMB Jul 104 Puts for $1.45 (9.5 times usual volume) with stock at $106.31

Last week, Ebix received a letter from the U.S. Attorney General for the Northern District of Georgia informing them that they were opening an investigation into allegations of business malpractice brought to their attention by pending shareholder class-action lawsuits. Ebix has dealt with allegations such as these before and they were all disclosed in its reports filed with the SEC. Ebix Chairman and CEO Robin Raina believes that these allegations are without merit and will be dismissed.

Despite CEO affirmations that everything is okay, some speculators believe that shares in EBIX can plummet all the way to zero. According to Gotham City Research, the stock is at most worth $8.00 per share. That is a generous estimate, as they did not take into account any accounting irregularities, regulatory event risk, flat/declining organic growth, tax risk, and other risks identified in their prior reports.

Ebix is also severely in debt. It owes over $80 million and $100 million to creditors and U.S. taxpayers, respectively. 

Last month, Ebix announced results for the first quarter of 2013. Total first quarter 2013 revenue was $52.6 million, an increase of 20% on a YOY basis, as compared to first quarter 2012 revenue of $43.8 million. Diluted earnings per share for the first quarter 2013 rose 13% YOY to $0.45, as compared to $0.40 in the first quarter of 2012.

The “Institutional Trade”:

On 5.24.2013 a trader sold 1678 EBIX July 20 Puts for $.60

Their Risk: $1940 per 1 lot
Their Reward: $60 per 1 lot
Breakeven: $19.40
Cash Received: $100,680

On 6.20.2013 These Puts are Trading for $8

This Trade has Lost: (1678 * $8 – $.60 * 100)= $1,241,720

(Full Disclosure: I am long EBIX July 20 Calls for $.20

Unusual Option Activity:

We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.

Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial.  We offer this service through our 7 hour daily LIVE trading room http://bit.ly/135QWt8 or through Premium Twitter feed with all entries, exits, and unusual options activity tweeted all day long: http://bit.ly/11f0L9u .

Order flow can however at times be deceiving. One might logically thing that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.