Rupert Murdoch is breaking up News Corp., and options traders seem to think that it could be very good news for the stock.
Just look at Tuesday's heavy options volume in News Corp. shares. Nearly nine times the average daily call volume traded, and 25 calls were traded for every put, which tends to indicate a great degree of bullish speculation around a stock.
The biggest trade of the day was the purchase of 20,000 July 30-strike calls for $2.00, which is a bullish bet that the stock will be above $32.00 at July expiration.
News Corp. is up 15 percent year-to-date, and is currently at 52-week highs. The stock's strength has been due to better-than-expected net income growth, which has outpaced both the S&P 500 and the media sector. Revenues have also been increasing, albeit slightly, which has helped to drive the earnings growth.