April options on KCG Holdings

The April options cycle expires on Friday, April 21. Not including today, this leaves 3 days of trading before expiry.

KCG Holdings (NYSE: KCG) is hovering around US$17.50 and their April 18 call options have a substantial bid of 16 cents, which puts them at an implied volatility of about 48%. Their historical volatility has been much less than this (typical options have been trading at around 20-25%, depending).

This is somewhat unusual, and probably instigated by the previous unsolicited buyout proposal at US$18-20/share prompted by Virtu (Nasdaq: VIRT) last month. Will there be a more solid proposal that will be made public soon?

3 thoughts on “April options on KCG Holdings”

  1. 26 cents today on a US$17.66 share price. A trade went off for 10 contracts at 50 cents (it was the bid for a very brief time).

  2. In one of my less brighter moments, I realized that option volatility was higher because they report earnings before the market opens tomorrow. Oops!

  3. Sacha,

    Great observation!! Too bad I did no follow up on it. Buyout price seems to be a little low and will surely make a few lawyers richer but I guess $20 is all we will get. Thanks for pointing out the initial opportunity.

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