Just a word about SBGI.
If you notice the premium with barely 3 days remaining on the $30 contract is unusually high at about $1.25, as shares are down about $0.90 to $30.40
The reason is probably because the Supreme Court is expected to issue its decision on Aereo broadcasting either this week or next.
If it’s this week SBGI shares will likely move very big, in one direction or another. If Aereo wins or can in any way continue re-broadcasting SBGI will likely go lower. The option market currently believes that the movement can be in the $28–32 range.
The issue then becomes one of what to do.
Close the position by buying back the option and selling shares and greatly reduce the ROI?
Roll over to the 7/19 option (earnings are in August) for a net of about $1.20 additional premium, but still at risk for a share decline, albeit with a month to recover any drop in share price?
Take the chance that either the decision will be made next week orthat the decision will be this week and will be in SBGI’s favor.
At the moment I’m leaning toward the final choice, but if shares go below the strike level prior to any announcement this week I will likely do a roll over to the July 2014 option.
