Shares of Pandora Media (P) are moving lower by about 1.25% today, to $13.09. Shares have settled into a trading range between $13.00 and $13.25 since the middle of December, after running to about $14 on rumors the company might be sold. (See also, Is Pandora Looking For Another Suitor?)

A trader, however, is taking advantage of today's weaker price and weaker equity market by buying about 2,900 contracts of Pandora's January 2017 $14 calls. The calls traded at a price of $0.33 in between the bid and the offer. Before the trade, there were only 13,900 contracts open for that strike price.

Today's option trade gives the trader exposure to the equivalent of nearly 290,000 shares of Pandora, for a fraction of the price. The value of the trade was about $96,000. The trader is betting that shares of Pandora will rise to $14.33, over the course of the next three weeks. That price would be the trader's breakeven point. We can calculate that by adding the premium or $0.33 to the strike price which is $14. Anything below $14.33 would result in the trader losing money. 

With the stock price currently around $13, the stock would need to go up nearly 10% over the next three weeks for this trade to be profitable. The stock traded at nearly $15 back in the middle of October, before the share price collapsed to around $10. At that point, rumors and talk of a Pandora acquisition began to surface, pushing the shares higher to today's current level. 

Last year, the company reported earnings during the second week of February. It is likely the company reports earnings around the same this year, making today's option play not a bet on earnings. 

One can speculate the trader is expecting acquisition talks surrounding Pandora to pick again once we cross into 2017. Chatter around the company has been quiet as of late and perhaps the trader is taking advantage of today's weak market and weak stock price to make a bet on talks happening before January 20th. 

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