Size option blocks in Zynga as a bullish position is adjusted
Size option blocks in Zynga as a bullish position is adjusted. The stock off 3c to $4.90 and 35K Sep 4.5 calls trade 80c when bid-ask was 77c to 87c. Then, separately, 20K Sep 3.5 puts trade 10c along with 20K Sep 4 puts at 18c and 39K Sep 5 calls for 57c. The Sep 3.5 puts and Sep 4.5 calls match a ratio risk-reversal from 1/28 when, with shares $4.42, 20K Sep 3.5 puts sold at 23c and 35K Sep 4.5 calls bought for 62c. The Sep 4.5 calls are now 40c in-the-money and liquidated to monetize the profit of 18c per contract, or $630K on the 35K lot, while Sep 3.5 puts were bought-to-close to monetize another 13c per contract, or $260K. Meanwhile, the Sep 4 puts and Sep 5 calls today open a new ratio risk-reversal and the position expresses confidence that the recent rally in shares (which included a 5% earnings move last Thursday) can continue in the months ahead.