Interesting Trades on Sprint (S)

Shares of Sprint Nextel Corp. S are higher on the session by 0.11%, currently trading at $4.61. The stock has been moving higher over the past six months, though it is off its highs near $5.31. There were two large trades that hit the tape today. The first was a short strangle, where the August $5 call was sold on the bid 10,000 times for $0.44-0.45 and the August $4 put was sold on the bid 10,000 times for $0.28. Net credit on the transaction is $0.72-0.73, roughly 15.60% of shares. The second transaction was a bullish risk reversal, where the August $4 put was sold on the bid 7,500 times for $0.28 and the August $5 call was bought on the offer 7,500 times for $0.45; this trade occurred just as the June $4 put was sold on the bid 10,000 times for $0.02. All three transactions occurred at the same time and suggest a net debit of $0.15. The trades clearly cannot have been executed by the same trader as both trades occur on the same strikes and would negate part of the other. With that said, the overall theses that each of these trades provides is that traders believe you should be long Sprint, but also short volatility in the name. Traders looking to play this should get long shares and short the August $5/4 strangle. Sprint Nextel Corporation is a holding company that offers a range of wireless and wireline communications products and services for individual consumers, businesses, government subscribers and resellers. The Company operates in two business segments: Wireless and Wireline.