Gold Options Showing Major Price Swings Coming (GLD)

Posted in General, Options  on January 8th, 2011
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The five straight days of lower prices in the SPDR Gold Shares (NYSE: GLD) comes with an interesting twist.  This week we saw elevated options trading when you consider that only one single day of the last week was above its average daily volume.  A fight appears to be more than just starting to brew.

On Friday, in the JAN11 CALLS there were nearly 45,000 combined Call option contracts versus close to 36,000 of the combined put options traded.

JAN12 $115.00 CALLS closed at $23,30 but there were 10,007 contracts traded on Friday versus a prior open interest of only 17,569 contracts.  Likely many were closed out, but we’ll know Monday.  In the JAN12 $130.00 PUTS after a $10.05 close we saw 7,110 contracts trade versus an open interest of 20,656 contracts.  Even out in the JAN13 CALLS there were a combined number of nearly 5,000 contracts which traded in the out of the money CALL strikes.

To show how crowded the gold trade is now, the $135 JAN13 CALL is the closest strike price.  Its last trade was $19.41 on Friday.  That implies that the GLD has to rise another $20.00 per share and that gold has to rise to close to $200 more per ounce by the third Friday in January of 2013 for that to break-even.

Our technical analysis affiliate is Adam Hewison of INO and he has spot gold looking oversold with $1,362 an ounce as the next support to watch.  We’d also note that S&P gave a $1,600.00 per ounce target by the end of 2011.
The other big call on energy and materials was where S&P surmised that gold would finish 2011 around the $1,600.00.  If that holds true, then $158 to $159 is what you’d expect on SPDR Gold Shares (NYSE: GLD).

Watch gold.  The GLD is not showing the active trading when you consider how much gold has pulled back.  The GDL fell to $133.58 after having closed out 2010 just a week ago at $138.72.  That is a drop of about 3.7%.  For whatever it is worth, the GLD also broke through the 50-day moving average and stayed there for the first time in months.

What is being set up will sound greatly simplified.  Unfortunately that is the way things are sometimes.  Gold is going to try to test much lower levels or we are about to see an explosive move higher.

JON C. OGG

Atheros Circuit Breaker.. On Qualcomm Deal (ATHR, QCOM)

Posted in General  on January 4th, 2011
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Atheros Communications Inc. (NASDAQ: ATHR) has been halted after a price-volume spike took shares through the roof.  Reports are out that QUALCOMM Incorporated (NASDAQ: QCOM) is in a deal to acquire Atheros for about $45.00 per share.  Atheros develops semiconductor system solutions for communication products from personal to enterprise access levels.

The New York Times’ DealBook just reported on it.

Atheros was already up over the last 3 months but shares are back to trading around $43.50 on more than 4 million shares as of 3:12 PM EST… a gai of about 17.5%.

Jon Ogg

Apple Options Volume Overshadows Stock Volume (AAPL)

Posted in Options  on December 27th, 2010
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There is a rare event today that has not been seen on many occasions.  Apple Inc. (NASDAQ: AAPL) is seeing more stock option trading interest today in its stock options on a fully leveraged basis than its shares are seeing.  The stock volume is actually anemic at 4.53 million shares as of 12:05 PM EST when a normal trading day’s volume is 17.5 million shares.

Here is the CALL option volume of the JAN-2011 CALLS:

$trike    Volume    OpInt
300.00    1,342    36,014
310.00    3,479    33,588
320.00    14,436    52,390
330.00    18,111    50,100
340.00    8,880    34,057
350.00    8,802    28,100
360.00    5,978    17,341
370.00    2,545    10,475
380.00    1,084    10,494
390.00    164    7,331
400.00    1,002    16,100
410.00    548    3,725
420.00    1,047    2,649

These alone come to over 60,000 contracts for the JAN-2011, which is over 6 million shares on a fully leveraged basis.  We have also seen close to 40,000 contracts trade in the PUTS for JAN-2011 and close to 10,000 contracts in each of the PUTS and CALLS in the weeklies that expire on December 30, 2010 as well.

JON C. OGG

Molycorp Options Surge As Speculators Find Alternatives (MCP)

Posted in General, Options  on December 27th, 2010
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Molycorp, Inc. (NYSE: MCP) is new enough that many will not even think of it being an “option alert” stock.  Still, the exponential gainer in rare earths is seeing a large jump in its shares on a mine restart and it seeing considerable options volume as well as investors look for any way to “play the stock on the cheap.”  At 11:45 AM EST we have already seen close to 4,000 of the CALL options trade in just the JAN-2011 CALLS.  The speculative contracts are showing more volume than they are total open interest before today:

JAN11    Volume    OpInt
49.00    205    22
50.00    1,832    1,327
55.00    485    2,145

We have also seen close to 4,500 of the various PUT options trade as well.  At 11:57 AM EST we have shares up 7.9% at $48.94 and the new high hit today was $49.99.

JON C. OGG

Daily Double: 10X Volume Alert in InterMune (ITMN)

Posted in General, Options  on December 17th, 2010
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InterMune Inc. (NASDAQ: ITMN) is soaring with more than a double on key news of its EMA recommendation of market ing approval in its idiopathic pulmonary fibrosis drug called Esbriet (pirfenidone).  The full news and analysis is available at BioHealthInvestor.com in the quest for potential ten-baggers.

What traders need to know is that at 10:20 AM EST we have a gain of 106% at $29.50 and the 52-week trading range is $8.34 to $49.46.  Even more noticed is a more than tenfold rise in average volume with 10.25 million shares having traded versus an average daily volume of about 944,000 shares.

The options volume, as you would expect, is now through the roof as well.  There have been over 10,000 contracts traded in the JAN-2011 CALLS and over 11,000 of the JAN-2011 PUTS.  The trading is elevated in teh April-2011 contracts as well.

Stay tuned, InterMune just got back on the map.

Jon Ogg

Interchange Fee Proposals Cause Exponential Volume Spikes (MA, V)

Posted in block volume, General  on December 16th, 2010
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Proposed change to Interchange Fees from the Fed is causing an exponential volume spike in shares of Visa, Inc. (NYSE: V) and Mastercard Incorporated (NYSE: MA).  It took a while for the exponential volume spikes to appear but appear they did.

At 3:24 PM EST we now have over 37 million shares of Visa traded with a 11.6% drop and the price is at $68.02 versus a close of $76.94 yesterday.

At 3:24 PM EST there have been over 6.1 million shares of Mastercard with a 9.5% drop to $225.49.  Average volume is only about 1.15 million shares.

JON C. OGG

Massive Exponential Volume in Tenet Options & Stock, More to Come? (THC)

Posted in General, Options  on December 10th, 2010
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Tenet Healthcare Corp. (NYSE: THC) is trading more volume than we can recall ever seeing.  While the company has never really recovered its former glory, the hospital told Community Health Systems Inc. (NYSE: CYH) no to its $6.00 buyout offer.  The common belief now is that Community Health will have to raise its offer price if it wants the company.

Tenet shares have been unbelievably active today.  With just under an hour of trading before the market closes, the gains have been a whopping 54% to $6.63.  What is even more impressive is the trading volume.

Tenet has traded MORE THAN 200 MILLION SHARES versus and the average volume is not even 8 million shares.

Options have been through the roof: JAN 2011 $7.50 CALLS show 17,408 contracts traded versus a prior open interest of 21,921 contracts; the JAN 2011 $5.00 PUTS have traded some 11,513 contracts versus a prior open interest of 14,055 contracts.  The FEB-2011 $7.00 CALLS have traded 9,354 contracts versus a prior open interest of only 45 contracts against 2,164 of the $6.00 PUTS.  The MAY-2011 $7.00 CALLS have traded 15,211 contracts against an open interest of only 31 contracts.

JON C. OGG

The Big Move Behind Horiyoshi Worldwide (HHWW)

Posted in General  on December 10th, 2010
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Horiyoshi Worldwide, Inc. (OTCBB: HHWW) has virtually come out of nowhere and is one we have never covered nor that we are likely to cover ahead as long as it remains a bulletin board stock.  This is one that a trader pointed out to us simply with the big question “WTF?” yesterday and today.  As it is bulletin board you are entirely on your own but there is a story here as to why investors and speculators are behind it.  Horiyoshi Worldwide has risen for literally more than 20 trading days in a row.

DEC-NOV Date   Volume     Close
Dec 09, 2010.  7,662,500  $3.10
Dec 08, 2010.  5,457,800  $2.70
Dec 07, 2010.  7,227,500  $2.21
Dec 06, 2010.  3,374,400  $1.88
Dec 03, 2010.  2,763,600  $1.80
Dec 02, 2010.  1,061,000  $1.69
Dec 01, 2010.  1,557,900  $1.65
Nov 30, 2010.  2,317,800  $1.63
Nov 29, 2010.  2,404,100  $1.58
Nov 26, 2010.  1,580,600  $1.56
Nov 24, 2010.  2,982,800  $1.54
Nov 23, 2010.  3,879,200  $1.49
Nov 22, 2010.  1,362,500  $1.41
Nov 19, 2010.  1,393,000  $1.35
Nov 18, 2010.  1,068,900  $1.28
Nov 17, 2010.  1,747,500  $1.22
Nov 16, 2010.  690,400      $1.15
Nov 15, 2010.  274,500      $1.08
Nov 12, 2010.  288,873    $1.08
Nov 11, 2010.  622,489    $1.06
Nov 10, 2010.  949,525    $1.04
Nov 09, 2010.  1,371,065  $0.99
Nov 08, 2010.  123,055    $0.85
Nov 05, 2010.  20,000     $0.80

The news wires have shown distribution deals being announced, as well as small company financing.  This appears to be a cult stock that is running as it signs more high-end distribution deals for its apparel line.

Here is the company’s description in its press releases: Horiyoshi Worldwide Inc., designs, manufactures, and markets Horiyoshi the Third, a high end clothing and accessories product line based on the artistry of World renowned Japanese Tattoo Artist, Yoshihito Nakano (Horiyoshi III). Its line is being sold in approximately 45 luxury retail boutiques located in 25 cities worldwide. Debuting in Fall 2009, HIII has been featured in leading fashion publications such as the New York Times, International Herald Tribune, the Los Angeles Times, Anotherman Magazine, Vogue and Style.com.

Again, this is a bulletin board company and we do not prefer to generally cover these types of companies.

Consider this as one of those that “POSTED WITHOUT OPINION.”  Still, we had to take a look when there are moves of this sort.

JON C. OGG

Stock Option Volume Explosion in Great Atlantic & Pacific (GAP)

Posted in General, Options  on December 10th, 2010
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The Great Atlantic & Pacific Tea Company, Inc. (NYSE: GAP) is widely reported as getting ready for a bankruptcy  Check out the options trading in DECEMBER-2010:
CALL$    Volume    OpInt
0.50    2,598    5
1.50    5,238    10
2.00    2,201    35
PUT$    Volume    OpInt
1.00    4,940    1,280
1.50    666    1,035
2.00    6,411    2,873
2.50    1,345    7,749

Here is the volume in JANUARY-2011 options as well:
CALL$    Volume    OpInt
1.00    2,441    45
PUT$    Volume    OpInt
0.50    1,594    3,030
1.00    5,091    10,068

May-2011 has also seen its $0.50 CALLS trade 1,516 contracts versus an open interest of literally only 5 contracts.

The stock itself is down almost 65% at $1.00 on more than 17.2 million shares as of 12:11 PM EST.  Average volume is not quite 800,000 shares.

JON C. OGG

SIRIUS Volume Almost Double in First Hour Alone (SIRI)

Posted in block volume, General  on December 9th, 2010
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By now you already know that Howard Stern has announced that he is sticking with SIRIUS XM Radio Inc. (NASDAQ: SIRI) in a new 5-year deal.  What is interesting is how much trading has gone into the news this morning.  It is almost an hour into the trading day and SIRIUS shares are already approaching 100 MILLION SHARES….

At 10:28 AM EST we have SIRIUS stock up 6.5% at $1.40 on literally 92.5 million shares.

The average volume is about 58 million shares and the 52-week trading range is $0.56 to $1.61.

The last day that we saw 100+ million shares trade was on November 4 with 185 million.  On October 13 there were 156 million shares traded, and we saw more than 100 million shares on October 5 and October 1.

JON C. OGG