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Motorola has had about as much good news as I've got hair: The company is losing market share every day, and its commoditized business is under attack by Samsung, LG, Nokia [NOK
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], and HTC.
But as bad as things are, MOT [MOT
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] shares may be worth a look now that they are at $3.48 as of this writing, some 66 percent under prices trading as recently as August.
We note an expansion in volatility in the MOT December calls, where the December 3 calls are trading 13,861 contracts against 939 open interest. The median volatility has jumped from 70 to 141 as shares tumbled from $4.60 to $3.48.
The average daily turnover of MOT calls in the last 30 days has been 10,000 contracts. But more than 19,500 changed hands in the first three hours of today's session, according to OptionMonster's proprietary systems, which track unusual options activity.
Is it a good idea to take a cheap shot on an in-the-money call for $0.77? (These December 3 calls are $0.48 in-the-money.) Well, that call is less than $0.30 of premium over stock, and we think the buying at this strike indicates that institutional interest may be returning. We'd set a $0.40 stop-loss.
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More Motorola rivals:
- Apple [AAPL
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- Research in Motion [RIMM
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- Palm [PALM
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]
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Jon 'DRJ' Najarian is a professional investor, CNBC contributor, and cofounder of OptionMonster.
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Data is a real-time snapshot *Data is delayed at least 15 minutes