Top Private Equity Firm Sees Heavy Options Upside
By: Blackstone Group, one of the world's largest private equity firms, hit a 52-week high for the third straight session yesterday along with heavy upside options trading.
CEO Stephen Schwarzman said yesterday that his industry has gotten past the worst of the recession, comments that may have encouraged the call buying that lit up our screens in large numbers. The trading was concentrated at the December 17 contracts, where nearly 15,000 calls changed hands.
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OptionMonster's real-time systemsshowed most of calls trading in a strong buying pattern, with the largest blocks going for $1.45 and $1.55. The volume was far beyond the open interest of 1,161 contracts at the strike, which has averaged just 55 calls per day for the last month.
Earlier this month Blackstone announced plans to purchase U.S. theme parks from Anheuser-Busch InBev for $2.7 billion. The company made headlines again this week by saying it is evaluating the prospects for up to seven initial stock public offerings in addition to one already in the pipe.
Blackstone rose 7.61 percent to $17.60 yesterday on heavy volume and moved up another 2.86 percent in after-hours trading. For the calls purchased yesterday to turn a profit, the stock would need to rise 4.8 percent to 5.4 percent from its closing price before the options expire in mid-December.
Total Blackstone calls traded at all strikes outnumbered puts by more than 4 to 1.
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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com.
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