More relative low volatility today, but the major indices are beginning to show some weakness and slowly move lower. The VIX and VXN are both moving higher, even with the lack of a dramatic move. This may indicate a rise in the average implied volatility of the S&P and NASDAQ.
Options trading remains busy today overall and we have seen some put buying in Allstate (ALL), this could be a trader speculating on a downturn in the stock, or it could also be a trader buying puts against long stock, which can be a protective move while the put is owned in the event of a retracement.
Remember, puts give you the right to SELL a stock. If you already own the stock when you buy the put, you are basically locking in a sale price, for this you will have to pay some premium. In ALL, the trader paid about $1.50 for the October 29 puts. The risk to buying options is 100% of the premium paid.
There is a fair amount of options action in Research in Motion (RIMM), up another 2% from yesterday, as well as in several other symbols across a variety of industry sectors.
Remember there are a couple hours left in the trading day and the volume of these issues may continue to rise, but this is where we are seeing some heavy options activity today. Another important consideration is that options can be bought or sold, and volume does not indicate which:
TRA: $46.78 down $0.1696 or 0.36% volume: 1.43 million shares
Mar10 45.00 Puts: volume over 17056, versus Open Interest of 36225
Mar10 46.00 Puts: volume over 16230, versus Open Interest of 2665
AMLN: $20.24 down $0.6600 or 3.16% volume: 5.37 million shares
Mar10 15.00 Puts: volume over 16994, versus Open Interest of 20215
Mar10 25.00 Calls: volume over 15202, versus Open Interest of 11947
RIMM: $76.68 up $1.6350 or 2.18% volume: 7.73 million shares
Mar10 75.00 Calls: volume over 15899, versus Open Interest of 38654
UNG: $8.07 down $0.2601 or 3.12% volume: 14.67 million shares
Apr10 9.00 Calls: volume over 15435, versus Open Interest of 76668
Apr10 8.00 Puts: volume over 11143, versus Open Interest of 56037
GME: $19.39 up $1.1100 or 6.07% volume: 7.88 million shares
Mar10 20.00 Calls: volume over 14926, versus Open Interest of 7928
SLM: $12.36 up $0.1700 or 1.39% volume: 2.72 million shares
Apr10 9.00 Puts: volume over 12422, versus Open Interest of 11011
AES: $11.47 up $0.2100 or 1.87% volume: 3.85 million shares
Apr10 12.50 Calls: volume over 11746, versus Open Interest of 692
Q: $4.80 up $0.0300 or 0.63% volume: 5.55 million shares
Jan11 5.00 Calls: volume over 11734, versus Open Interest of 22167
AAPL: $224.61 down $0.2300 or 0.10% volume: 6.54 million shares
Mar10 230.00 Calls: volume over 11568, versus Open Interest of 26982
AIG: $37.03 up $0.7899 or 2.18% volume: 25.11 million shares
Mar10 40.00 Calls: volume over 10656, versus Open Interest of 17346
YHOO: $16.48 down $0.3150 or 1.88% volume: 11.08 million shares
Jan11 17.50 Calls: volume over 10568, versus Open Interest of 56860
XLK: $22.68 down $0.0000 or 0.00% volume: 1.68 million shares
Jan11 24.00 Calls: volume over 10005, versus Open Interest of 32551
GE: $16.38 down $0.1295 or 0.78% volume: 22.25 million shares
Mar10 17.50 Calls: volume over 10000, versus Open Interest of 150802
These are my team’s observations. If you’re seeing something we’re not, or if you have any questions about what I’ve outlined above, please feel free to add your voice in the comments.
Photo Credit: mag3737
Specialty retail name GameStop Corp. (NYSE:GME) is atop the OptionsHouse Hotlist today as a number of strikes have seen large blocks change hands. It appears as though an investor is rolling out of an existing front-month call spread and buying an intermediate-term bull call spread and selling a later-dated out-of-the-money put in order to finance the purchase.
GameStop (NYSE: GME) scored an upgrade Friday morning at BB&T Capital Markets. The firm set a 12-month price target of $32, citing decreased competition in the high-margin market of used game sales. BB&T also noted the retailer’s better-than-expected fourth-quarter results as a positive catalyst. The stock is currently trading near $24.90.
