Thursday, December 3, 2009

Huntsman Options Trading Explosion (HUN, DD)

Huntsman Corporation (NYSE: HUN) is seeing a surge in options activity.  There have been 30,698 calls traded, 15X average, and implied volatility is spiking 44% on rumors that Dupont (NYSE: DD) is looking at a possible $18 offer for shares of the company.  The action has been  extremely bullish with block buyers in calls at the offer ahead of the rumor and continuing now in strikes as high as the January $13 calls.  Shares trade 1.45X cash value and look very cheap on valuation.

This deal appears to fit in with some deals of the past and it is worth noting that Huntsman was a busted private equity acquisition where Hexion Specialty Chemicals was originally going to acquire the company for about $28.00 per share.  Shares are also up almost 8% at $10.70 and the 4.5 million share average volume has now been crossed at 11:25 AM EST.

Joe Kunkle,

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