Volume Spike Investor » Options

Gold Options Trading Heats Up (GLD)

247admin — Thu, 21 Aug 2008 15:14:00 +0000

Based upon the rise in oil and commodities and the ultimate flight to safety or the ultimate flight to inflation protection, we are seeing again some increased call option activity in SPDR Gold Shares (NYSE: GLD). This is the ETF that tracks the price of gold by essentially 1/10 of the price. At 11:08 AM EST we have seen a 3% rise to $82.47 as of 11:12 AM EST in the gold ETF. With oil up $6.00 on Russian-US tensions, what else do you expect? The gold ETF options are among the CBOE’s most active contracts as you will see below:

OPTION-STRIKE    Volume    OpInt
OCT08 $85.00 CALLS    12,742    2,429
OCT08 $90.00 CALLS    23,848    28,543

Traders are playing October contracts more than others as the time-value erosion versus the premium paid for time value is maximized.

Jon C. Ogg
August 21, 2008

MFA Mortgage Exponential Options Surge (MFA)

247admin — Wed, 16 Jul 2008 21:31:46 +0000

MFA Mortgage Investments Inc. (NYSE: MFA) rarely if ever makes the most active options list. Today it defied that statement. The stock actually rose much less than other financials as its gain to $6.35 was a mere 2.1%. We saw 50,253 contracts of the AUG08 $7.50 CALLS trade today. The prior open interest was a mere 446 contracts. When we look at the open interest and add in today’s volume in all of the close contracts that expire this Friday, that 50K is about 6-times all of the outstanding current month contracts volume and open interest.

MFA Mortgage’s stock also only traded 2.75 million shares today and that is under the 2.82 million shares on average. Its 52-week trading range is $5.00 to $11.07 and its market cap is $963 million.

Jon C. Ogg
July 16, 2008

OPTIONS ALERT at 52-Week Lows: SanDisk Corp. (SNDK)

247admin — Tue, 01 Jul 2008 16:10:17 +0000

SanDisk Corp. (NASDAQ: SNDK) is seeing some unusual options trading in the near months contracts today. Here we show the options contracts by strike and by month with open interest there:

JUL08 CALLS   Volume   OpInt
$25.00            9,821    25,781
$27.50            17,840 29,408
$30.00            1,957    11,285
$32.50            4,567    10,185

AUG08 CALLS Volume OpInt
$20.00          6,878    1,398
$22.50       12,736   3,663
$25.00          1,463    2,224

This is occurring on a day where the stock itself is getting shelled. We have seen a major drop that took place over the last hour and shares are down some 6.1% at $17.56 as of 12:08 PM EST. We have also seen 7.5 million shares traded.

Avg. Volume: 9.9 million shares
52-week range: $18.63 to $59.75
Market Cap: $3.9+ Billion

Jon C. Ogg
July 1, 2008

Anheuser-Busch Options Activity Increasing (BUD)

247admin — Wed, 11 Jun 2008 18:23:40 +0000

Anheuser-Busch Companies Inc. (NYSE: BUD) is starting to see another pickup in its call options activity today, which is looking similar to a move we saw two weeks ago. That doesn’t mean any deal nor any major news is imminent, but it usually sends traders into a frenzy to see what they can dig up or if any rumors are in the stock. We have included the various strike prices for each contract and we included today’s trading volume as of 2:20 PM EST (listed as “Vol.”) and the open interest (OpInt).

OPTION/STRIKE       Vol.       OpInt
JUN08 $60.00 CALLS   10,981   111,820
JUL08 $60.00 CALLS    12,649   53,630
JUL08 $65.00 CALLS    20,822   21,168
SEP08 $60.00 CALLS    3,552    43,683
SEP08 $65.00 CALLS    8,698    47,320

There was also an unusual PUT trade today as well, and based upon the open interest being half of today’s volume that is almost certainly a new position trade being put on…..

OPTION/STRIKE Vol. OpInt
SEP08 $65.00 PUTS 22,824 11,435

Shares are still in negative territory for the trading day although a steady move up was seen since about 1:30 PM EST today. Trading volume is roughly 4 million shares and average trading volume is 6.44 million shares.

Jon C. Ogg
June 11, 200

Aggressive Put Options Activity Again in Lehman (LEH)

247admin — Wed, 04 Jun 2008 14:21:13 +0000

Lehman Brothers Holdings Inc. (NYSE: LEH) has been under aggressive fire, and with all the needs of capital that have been rumored it is of no real surprise. Even though the company has denied every rumor out there, it is seeing excessive PUT OPTION activity in the early morning and that should lead to even more volume after the other traders spot this.

At 10:07 AM EST we noticed the following options contracts had traded:
Co    Mo/Strike contracts Price     Change
LEH   JUN20        2,838     $1.00    (+$0.29)
LEH   JUL20         1,932     $1.74    (+$0.34)
LEH   JUN25        1,931     $2.04    (+$0.32)
LEH   JUL30         1,519     $4.80    (+$0.60)
LEH   JUN30        1,512     $3.70    (+$0.35)

By 10:17 AM EST we have seen Lehman shares themselves trade more than 32 million shares, making it already crossing another average daily volume level. Also by 10:17 AM EST the number of these options contracts had grown far more to more than 7,500 of the JUN20 PUTS and the other strikes were more active as well.

Jon Ogg
June 4, 2008

Options Volume Spike: BCE (BCE)

247admin — Thu, 29 May 2008 18:30:07 +0000

There has been some highly unusual options activity today in BCE, Inc. (NYSE: BCE). Not only that, but it is for current run expiration dates on the puts and calls in June 2008 (expire June 20).

We have seen over 20,000 contracts trade in both the $35.00 June Calls and Puts today, so someone is likely making a bet that the price is heading considerably up or considerably down. There have been 20,045 contracts of the JUNE $35 CALLS and 20,150 contracts of the JUNE $35.00 PUTS. The open interest before this was only 5,320 contracts on the calls and 4,360 on the puts.

This represents a bet of more than 2 million shares on a leveraged basis, and this was very likely a straddle. If we take the “last” trades and calculate the premiums of $1.35 for the calls and $1.40 for the puts, then whoever bought this believes that BCE shares are headed north of $37.75 or south of $32.25 by June 20.

As a reminder, after the Clear Channel deal changed and after so many other mergers have fallen apart, BCE was the “other big merger speculation” play where many thought the terms of a deal would change. BCE is Canada’s largest telecom operator, and the company asked the nation’s Supreme Court yesterday to hear its case to overturn a lower court’s decision that would likely prevent its $35 billion sale to the Ontario Teachers Pension Fund.

This merger was agreed to in June 2007, so it has been on the books for some time. Shareholders have also approved the merger with roughly a $43.20 price in US dollar terms.

It looks like the deadline is Friday (tomorrow) and if this is reheard it appears that June 17 would be that date.

It is really easy to see why someone made this bet. Just on May 22, this stock traded more than 20 million shares and its shares fell more than 10%. On that day it closed at $33.10. The day before it closed at $37.83. On May 13 it was at $39.01.

If the merger truly breaks apart, this one is likely to head much lower towards $30.00. If the merger is allowed to proceed it could head back up towards $40.00 or even higher. Then we’ll see if the financing changes.

Jon Ogg
May 29, 2008