heres an interesting one for you guys, local company for me headquartered here in Rochester, NY
im sure youve heard of them lol
Option players look for a bounce in Eastman Kodak
Thu May 8, 2008 5:13pm EDT
By Doris Frankel
CHICAGO, May 8 (Reuters) - Option traders are banking on a recovery for shares of photography company Eastman Kodak Co (EK.N: Quote, Profile, Research) this summer after the stock hit a 27-year low.
A huge amount of call activity on Thursday indicated some traders believe the stock could turn around, if for no other reason than a technical rebound.
"I think investors may be looking for a bounce off the new lows set today," said Scott Fullman, director of derivative investment strategy at broker-dealer WJB Capital Group in New York. "The technical indicators have oversold readings."
A key measure of short-term momentum, known as the relative strength index (RSI), indicates Kodak's stock has fallen too far, too fast in recent sessions.
The 14-day RSI was 24.9 on Thursday, below the key 30 level for the fifth day in the past six sessions. A reading below 30 suggests a stock is oversold and ripe for near-term recovery.
Shares of Eastman Kodak edged up near the close on Thursday to end 1 cent higher at $16.55 after bottoming at $16.21, its lowest level since 1981.
Kodak this month posted a bigger-than-expected quarterly loss as higher silver and aluminum costs and increased spending on its ink-jet printer business weighed on margins.
Its shares have fallen as investors remain worried about having to wait even longer to see sustained profits after Kodak piled up wider losses in its consumer printing and digital camera unit.
But on the options market on Thursday, roughly 22,000 calls and 1,095 puts changed hands in Eastman Kodak, six times the normal volume, according to option analytics firm Trade Alert.
Directional sentiment indicated by the volume was 70 percent bullish, Trade Alert data showed.
A lot of the action was in the June and July $17.50 call strike, allowing investors to buy the shares at $17.50 apiece.
The most active contract was the June $17.50 call with volume of 11,205 contracts against the previous day's open interest of 3,452, indicating new positions were initiated.
"Due to the recent sell-off in the stock, it looks like institutional investors are looking for Eastman Kodak to finally pull out of its slump," said Pete Najarian, a founder of Web information site optionmonster.com.
According to Najarian, an institutional-sized buyer stepped in near midday to buy June $17.50 calls, paying 45 cents a contract on more than 5,000 lots in a single trade.
"This could be just an inexpensive opportunity to bet on a rebound in Eastman Kodak shares," Najarian said. (Additional reporting by Franklin Paul in New York; Editing by Braden Reddall)
Got my guns, you have yours?
