Stock & Options Volume Review in E*TRADE (ETFC)

Posted in General, Options 
September 19th, 2009

E*TRADE Financial Corporation (NASDAQ: ETFC) has been very active in both common shares and in options.  Friday’s 300+ million shares came to 300% its average trading volume and this is now the highest close since June 12 and May 8 where this closed at $1.97 each day.  We would also note that there were 10 consecutive trading days in April where thise closed above $2.00.  Its stock is under $2.00, so with a low price you would wonder why options volume is so strong.  Some would argue that at $2.00 per share and with so much of its operations beholden unto Citadel that its stock is already a call opti0n.    But traders do and have been using those $2.00 strikes for their way to own E*TRADE on the cheap…. In OCT-2009 expiration we saw 45,723 contracts trade and the open interest was already 170,366 contracts.  After that the strike fluctuations vary on volume but the activity is almost entirely one-sided and call-related: JAN-2010 calls saw over 12,000,  contracts trade and APRIL-2010 saw over 26,000 contracts trade.  With two broker upgrades and a bull market behind it, E*TRADE is still getting interest. The good news can keep coming even after Citigroup and Goldman Sachs raised the ratings…. Just be advised that there are probably going to be many natural sellers if this one gets back above $1.90.  -JON OGG

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