Volume Spike Investor

Mattel Inc. (NYSE: MAT) is trading huge volume in the April 2010 strikes with 1,328 January $20 calls and 9,431 January $22.50 calls trading, and almost all the action new opening buys.  The calls all traded around the same time with a huge block accounting for most of the volume, and the action does not look tied to shares.  Implied volatility has spiked from 41% to 50% with earnings scheduled for October 16th.  The recent offer by Disney to buyout Marvell makes things tougher for both Hasbro and Mattell so possibly this trader is eyeing a potential mega-merger among the toy manufacturers.  Many years ago Hasbro rejected a $5.2B merger proposal from Mattell, but recent industry competitive action may get talks started again, with less concerns over anti-trust matters.

-JOE KUNKLE, OptionsHawk.com