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Bullish options bets on RIM soar to highest level in four years

Wednesday, November 16, 2011

Options traders increased bullish bets on the shares of Research In Motion (RIM) on November 15 to the highest level in four years, wagering that the stock's price will recover from the 69 percent drop it has experienced lately.

Bloomberg data indicates that three-month put orders to sell RIM stock currently costs 1.9 percent more than call orders to buy, and fell to its lowest level in four years on November 10. The increase in the number of call options has been attributed to speculation that the company will receive an acquisition offer, Matt McCormick of Bahl and Gaynor Investment Counsel stated.

"When you see this parity occur, either fundamentals are going to improve or the stock is going to rapidly rise," McCormick, told the media outlet in a telephone interview on November 10, according to the media outlet.

RIM has been plagued recently by a plummeting stock and Blackberry devices with service outages. Even though the company launched an investigation into what caused the devices to suffer service outage for three days in October. Investors working with discount brokers might benefit from reading reports on call options such as this. 

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