How High Can SIRI Keep Streaming?

Sirius XM SIRI – NASDAQ

Monday, March 13, 2017

Trading low-priced stocks can often be a fools errand. Inexperienced traders are drawn to penny stocks, but these names are generally inexpensive for a reason.

However, Sirius XM SIRI – NASDAQ might be the exception to the rule. While SIRI is only $5.44, the company is valued at $24.5 billion dollars. And so far this year, shares are up 35%.

According to a trade we spotted crossing the tape, expect more strength. Earlier today, a customer bought 30,000 SIRI April 5.5 calls.

SIRI

At just $0.14 per contract, “only” $420,000 was spent but don’t discount it. This trade was still plenty unusual as SIRI trades 5,523 call options per day on average.

Given a break-even price at expiration of $5.64, SIRI needs to increase 3.7% for this trade to pay off. If SIRI can keep streaming higher, this customer is primed to make $300,000 for every $0.10 above $5.64.

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