January 14, 2015 / 10:16 PM / 5 years ago

BlackBerry options activity surges on Samsung approach report

NEW YORK, Jan 14 (Reuters) - Options activity in BlackBerry Ltd jumped after a Reuters report that Samsung Electronics Co Ltd had approached the Canadian company about a possible takeover deal.

Call volume on BlackBerry options swelled to about four times normal after the report that Samsung had approached BlackBerry about buying the company for as much as $7.5 billion.

The value of BlackBerry calls, which allow the purchase of shares at a specified price in the future, soared, in some cases by several thousand percent. U.S.-listed shares rose 29.7 percent to close at $12.59 on Wednesday.

Calls that had been betting on BlackBerry shares rising above $12 were the most heavily traded. These had been worth 8 cents at the start of the day but were worth $1.31 by the close of trading, according to Thomson Reuters data.

The news also meant huge gains for some traders who bought calls earlier in the day.

There was a noticeable uptick in option buying in $11 calls expiring on February 20 as early as 10:03 a.m. EST (1503 GMT), with about 2,581 options purchased for an average price of about 18 cents, Ophir Gottlieb, chief executive of Los Angeles-based Capital Market Laboratories said.

This was followed by another wave of call buying starting at 10:24 p.m. EST when 843 more calls were bought for the same price, he said.

The options are now worth $2.11, or more than 10 times the price they were bought for, according to Thomson Reuters data.

“The volume is interesting, potentially improper, but not obviously so to me,” Gottlieb said. (Reporting by Saqib Iqbal Ahmed; Editing by Christian Plumb)

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