Waiting on LeBron Drives Madison Square Options: Chart of Day
July 7 (Bloomberg) -- Rick Horrow, founder of Horrow Sports Ventures Inc. and a Bloomberg Television contributing editor, discusses the outlook for National Basketball Association free agent LeBron James and the finances of the New York Mets. Horrow talks with Michele Steele on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
Trading of bullish Madison Square Garden Inc. options surged to a record, one day before LeBron James announces whether he will leave the Cleveland Cavaliers for the New York Knicks or another basketball team.
The CHART OF THE DAY shows that 15,679 call options linked to shares of Madison Square Garden, which owns the venue where the Knicks play, traded today. The most-active contracts were July $22.50 calls as the shares surged 6.4 percent to $21.57.
James, the National Basketball Association’s Most Valuable Player the past two seasons, will announce his decision tomorrow at 9 p.m. New York time, according to his website. If he joins the Knicks, Madison Square Garden earnings would rise to a record, Crain’s reported June 21, citing Patrick Rishe, a professor of economics at Webster University.
“There’s been call buying on speculation that he’d sign with the Knicks,” said Joe Kunkle, founder of OptionsHawk.com, a Boston-based provider of options market data and analytics. “There’s definitely a bullish bias because there are a lot more people buying the calls.”
This month’s options expire on July 16. Madison Square Garden’s highest closing price since the shares began trading in January was $22.33 on April 12.
To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.
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