Filed under: Deals, XM Satellite Radio (XMSR), Sirius Satellite Radio (SIRI), Options

Sirius Satellite Radio (NASDAQ: SIRI) volatility at 68; Arbitrage spread tightens into FCC decision.

• SIRI is recently up $0.22 to $3.53, over 6%. SIRI and XMSR announced on 2/20/07 a merger of equals. XMSR shareholders will receive 4.6 SIRI shares for each XMSR share.
• Cowen says: “We expect FCC approval before Dec. 4, the end of the FCC review period. We believe approval as early as Oct. is possible. Maintain Outperform on both XMSR & SIRI.”
• XMSR-SIRI arbitrage premium spread is at 12%. Mel Karmazin is CEO of SIRI.
• XMSR December option implied volatility of 68 is above its 26-week average of 51 according to Track Data, suggesting larger price risks.

XM Satellite Radio (NASDAQ: XMSR) volatility up; Arbitrage spread tightens into FCC decision.

• XMSR is recently up $1.07 to $14.69.
• SIRI October option implied volatility of 71 is above its 26-week average of 53 according to Track Data, suggesting larger price risks.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

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