Expedia, Freeport Grab Option Spotlight

by Frederic Ruffy | May 19, 2011 4:33 pm

Your daily options trading[1] wrap up.

Sentiment

A day of relatively uneventful trading. Economic news was mixed. The Labor Department reported that jobless claims filings for benefits fell by 29,000 last week, to 409,000. Existing Home Sales hit an annual rate of 5.05 million in April, down from 5.09 million in March. Crude oil lost $1.74 to $98.36 and gold gave up $3.3 to $1,492.5. However, the Dow Jones Industrial Average is up 45 points and the NASDAQ gained 5.9. The CBOE Volatility Index (CBOE: VIX[2]) eased .48 points to 15.75. Trading in the options market is surprising light given that tomorrow is expiration Friday. 6.8 million calls and 6.4 million puts traded across the nine options exchanges so far.

Bullish Flow

Expedia (NASDAQ: EXPE[3]) adds 23 cents to $26.87and one strategist sells EXPE Oct 24 Puts to buy the EXPE Oct 27 – 31 Call Spread, paying 32.5 cents, 7500 times. The position looks opening and tied to 420,000 shares at $26.80. EXPE has performed well lately. Shares gained 4.2% yesterday and were among the best gainers in the NASDAQ 100. It has now rallied 35.3% since February. Earnings were last reported on April 28.

The top equity options trades in the first hour of market action Thursday were in Freeport McMoRan (NYSE: FCX[4]). Shares are down 29 cents to $48.33 and the FCX Jun 49.5 – Aug 50 Call Spread trades at $1.37, 11,000 times. Looks like a roll, and possibly closing out a bullish position in the June 49.5 calls opened on May 11 when the May – Jun 49.5 call spread traded multiple times. 12,844 Jun 49.5 calls traded on May 11 and open interest is now 20,142.

Find more option analysis and trading ideas at Options Trading Strategies[5].

Bearish Flow

China MediaExpress (NASDAQ: CCME[6]) is reeling today after the NASDAQ de-listed the stock. Shares had been halted since March amid allegations the company misrepresented financials. CCME is down $6.94 to $2.19 and options volume is 1,650 calls and 17,000 puts. The action is liquidating trades. The Options Clearing Corporation is only allowing closing trades and no new positions can be initiated in CCME.

Implied Volatility Mover

Gen-Probe (NASDAQ: GPRO[7]) is down $3.68 to $82.98 and implied volatility in the San Diego-based research company is up after Thermo Fisher Scientific (NYSE: TMO[8]) made a bid for Phadia. There had been speculation that TMO was interested in GPRO. According to a Bloomberg piece yesterday, Life Technologies (NASDAQ: LIFE[9]) and Novartis (NYSE: NVS[10]) might also be interested in Gen-Probe if TMO looks elsewhere, which is possibly why GPRO rallied 9.4% Wednesday. Today, however, the stock is down and options action includes 2,200 calls and 1,200 puts — which is about double the average daily. The action is mostly in the May and June puts and calls with strikes ranging from 75 to 90. Meanwhile, implied volatility in GPRO options is up 16% to 46.

Options Flow

Bullish flow detected in Brocade Communications (NASDAQ: BRCD[11]), with 12,716 calls trading, or two times its recent average daily call volume.

Bearish activity detected in American Superconductor (NASDAQ: AMSC[12]), with 10,550 puts trading, or seven times its recent average daily put volume.

Bearish activity detected in China-Biotics (NASDAQ: CHBT[13]), with 9505 puts trading, or four times its recent average daily put volume.

Increasing volume is also being seen in Kodak (NYSE: EK[14]), Mosaic (NYSE: MOS[15]), and Salesforce.com (NYSE: CRM[16]).

Frederic Ruffy is the Senior Options Strategist at Whatstrading.com[17], a site dedicated to helping traders make sense of the complex and fragmented nature of listed options trading.

Source URL: https://investorplace.com/2011/05/expedia-freeport-grab-option-spotlight-vix-expe-fcx-gpro-tmo/

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