OPTIONS SPIKE: Anheuser-Busch (BUD)

Posted in General 
May 30th, 2008

Anheuser-Busch Companies Inc. (NYSE: BUD) is suddenly seeing some unusual options activity in late morning trade.  We saw some elevated trading earlier but over the last 90 minutes the trading in current run JUNE 2008 call options volume is running.  It isn’t highly unexpected considering all of the InBev rumors that have been ongoing regarding a potential takeover of the US beer giant, but the pace would indicate more of an immediacy rather than some pondering.   Here are the trades that had been seen in the June 2008 Calls right before NOON EST:

Strike     Last   Volume   Open Int.
60.00    1.10    39,370     79,194
65.00    0.28    43,457     10,296

Interestingly enough, the option activity is so far limited to the current run June month.  On a fully leveraged basis, those options would equate to more than 8.2 million shares. The July and September options are mum in comparison.  When that is the case in favor of the current month expiration, it looks like conviction that a deal could be perceived to be imminent.  If it was just “developing” or something that might take place in a few months out then traders would be trading the July or September contracts.

This has also seen 4.6 million shares of stock trade today with shares up about 1.4% at $57.33 on the day.  Its 52-week high is $58.00 which was recently seen, and that also appears to be an all-time high.

Jon Ogg
May 30, 2008

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