Sponsored By:
| Dow | 10,318.16 | -14.28 |
| NASDAQ | 2,146.04 | -10.78 |
| S&P | 1,091.38 | -3.52 |
- Events & Appearances
- Special Reports
- Getting Started
- FAQ
- Modify Your Account
- Glossary
- Renew Subscription
- About the Adviser
November 21, 2009
- Subscriptions:
GigaMedia Ltd. (GIGM)
March 13, 2009Dear Fellow Options Trader,
GigaMedia Ltd. (GIGM), which develops and licenses online gaming software, is on the big-money investors' radar right now.
Internet gaming is currently illegal in the United States. However, Rep. Barney Frank has confirmed he will re-introduce legislation that would allow for Internet gaming in the United States, as the political environment has changed since the inauguration of President Barack Obama, and the taxation of online gaming could be a new and material source of tax revenues.
If a legislative change is made, GIGM would be a primary beneficiary.
In the meantime, during the past several days, there has been unusual and concentrated buying of the GIGM April 7.50 Calls. There are now more than 26,000 call contracts open versus 6,600 put contracts.
GIGM was scheduled to report earnings next week. Analysts expected the report to be below expectations. Last night, the company announced that its earnings are essentially in-line with analyst expectations, and it will make a complete earnings report at the end of this month. This announcement removes some near-term risk to the options play and gives us a green light to move forward.
With Barney Frank in the eye of the spending storm in Washington, D.C., the need to find sources of revenue to pay for the spending, and with option investors loading the boat with calls, we think it makes sense to place a bet on GigaMedia by going long the GIGM Oct 7.50 Calls (GBUJU) for 80 cents or better.
Have a great day trading.
Nick Atkeson and Andrew Houghton
Editors
Options Trader
