Buying This Manchester United Call Option On Tuesday Would Have Yielded A 10-Fold Return A Day After Thanksgiving

Shares of football club Manchester United PLC MANU surged over 65% in five days following a report that Apple Inc. AAPL is interested in buying the soccer team.

What Happened: Manchester United had announced that the soccer team’s owners are weighing a potential sale and said it was commencing a process to explore strategic alternatives, including a new investment.

As a result of the surge in the stock price, Manchester United added over a billion dollars in market capitalization over the last few days. However, later MacRumours claimed that the report was not true.

See Also: Investing For Beginners

Prior to the stake sale report, Manchester United shares were trading close to the $13-mark.

Had you purchased the $15-strike Call option of Dec. 16 expiry on Tuesday — when the soccer club announced the potential sale process — at the closing price of $0.62, you would have made a 10-fold return in a matter of three days.

The option closed at $6.7 on Friday, according to data by Barchart.

Benzinga’s Take: Manchester United stock witnessed a major breakout on Nov. 22, breaching the long-term resistance of close to the $15-mark. However, the stock closed below that level at the end of the session, which did not provide a strong confirmation of the potential trend.

manchester-united-chart

Chart Courtesy: Benzinga Pro

On Nov. 23 the stock witnessed another strong upward movement. That was the day when risk-averse traders could have bought the Call option between $1.55-4 levels. Despite the late entry, the option price shows there was a potential for over a 50% gain by Friday.

Read Next: Anti-Xi-Jinping Protests Drag Down Oil, WTI Futures Fall To Lowest Level In Nearly 2 Years

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date of Trade
ticker
Put/Call
Strike Price
DTE
Sentiment
Posted In: M&ANewsOptionsSportsMarkets
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!