Some big dough got together and started to bang their heads together about DELL.? I use a DELL computer and it works just fine.? Personally I don?t like working on an iPad thingy and looking at the market full time on one of those gizmos would leave me with less than the one eye I have that works.? Clearly I am in the minority since the consumer is not buying as many made to order Dells as they once did.? Michael Dell made billions taking the company public and he no doubt will make billions taking it private but $13 bucks per share won?t fly.? It would have to be more than $14 at least since DELL is sitting on all that cash.
We looked at DELL in the Pit Report yesterday and we tried to find a trade that looked ok.? We thought about a cheap Feb butterfly using the 10/11/12 strikes but that really did not suit. Usually if I don?t see anything that looks remotely interesting I just sit it out and wait for the stock to come to me.? I think with the DELL down a bit today something more interesting pops up.
So it is with DELL today.? The volatility got bid up and the stock did too, until today.? The fact that there was not more concrete news sent all the fast money folks heading for the hills.? Now the options I think are more tradable.? The name is at the point where it will move up well past $14 or down to $11 or so in the next few weeks.?
Livevol (r)?www.livevol.com
If you note the area I have highlighted the 1 x 2 call spreads are not bad looking now that the IV and the stock has come down.? If you can add them for a credit that is a decent little trade there.
Livevol (r)?www.livevol.com
The Trade
Try the DELL 12/13 1 X 2 call spread for a .10 credit or better.? If it gets bought out or the IV pops again the trade is a winner.? If DELL slips back into the dustbin of dead takeover targets you make coffee money after commissions.