Thursday, September 9, 2010

September 10, 2010: Resident Evil

There's only one movie opening wide this weekend, and I don't have a lot of interest in it. Milla Jovovich continues her run of battling zombies etc. in Resident Evil: Afterlife, in 3D. Stock (RESE4) is doing well, up to H$64, just off the high of H$65. Strike price is H$25, or a stock price of about H$67. Call is doing particularly well, at H$4 and a half. That suggests an opening weekend of about $30 million, or a price of about H$80. That's a bit of a disjunction with the stock. Put is tanking, as expected, down to H$1 and change. I'm sure it's going out on a ridiculously wide release for a B movie, since it has the field to itself. It's also that rarest of creatures, an action-adventure franchise with a female heroine. There are only 3 reviews on, which usually means that it was not screened for critics, which would be utterly unsurprising. I think the call is overpriced, but it looks like this franchise is not running out of steam. The fact that there are no other movies being released this weekend suggests that the other studios want to give this movie some leeway.
Stock: Long
Call: Short
Put: Short
Update Sunday night: Nailed it, which wasn't hard, but it feels good. It opened at $27.7 million, which was very close to the stock price. Not really much of a surprise, since this was a very known quantity. I was betting on it hitting the sweet spot between the call and put, and I was right about that. 3 for 3. Let the holiday/Oscar season begin!

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