Option Traders Turn to the Russell 2000

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The market is up somewhat this morning with major indices climbing back to previous support levels, said Jim Bittman, senior instructor at the Options Institute, the highly respected training school operated by the Chicago Board Options Exchange (NASDAQ: CBOE).

“After last week’s debacle the Dow, Russell 2000, S&P 500 and others are above recent highs this morning. The market has comeback to its support levels,” noted Bittman.

The sector catching Bittman’s eye is “healthcare. That makes sense. It’s climbing a wall of worry with all the talk about healthcare restructuring.”

Bittman began teaching at the Institute when its classes were limited to in-person, two-day training sessions at the CBOE’s headquarters in the Loop.

Nowadays, the Institute offers a wide range of education “from free to expensive with several online webinars that can be accessed through archives or live,” said Bittman. “We use technology so people don’t have to fly here.”

Indeed, tomorrow InvestorPlace option contributor Dan Passarelli will lead a live Options Institute webcast on “Be a Market Taker! Adjusting Iron Condors,” from 3:30 to 4:30 Central time. Passarelli is a former CBOE market maker and Options Institute instructor. The class will cover remaking iron condor trades when the market has moved against the original positions.

That may be an example of the more sophisticated training offered. But the Institute rolled out the Options Institute Plus with three levels of education for everyone from option beginners to active traders looking to hone their skills. The Institutes Web page describes 13 different seminars and classes available.

The Institute still offers the in-person classes, though they’ve added eight follow-up webinars that provide trading ideas and support for attendees after they’ve gone home, said Bittman.

Your intraday options trading update.

High Options Volume by Strike

The iShares Russell 2000 Index ETF (NYSE: IWM) is busy today as traders turn to broad-based indices after last weeks commodity sell-off. The IWM May11 79 Put is down .24 to .15 with about 42,000 contracts traded. The IWM May11 76 Put is now at .07 after trading 31,000 options.

The SPDR S&P 500 ETF (NYSE: SPY) holds a number of the busiest strikes, including the SPY May11 137 Call and the May11 134 Put. Each has traded about 40,000 contracts. The calls are up .06 to .42.

The iShares MSCI Emerging Markets Index (NYSE: EEM) is down slightly to 48.23, and the Jun11 50 Calls trade 33,000 options, down .10 to .65. Interestingly the EEM Jun11 45 Puts also down .10 to .49, trading nearly 30,000 options.

Major Stock Trading Volume Movers

Sysco Corp. (NYSE: SYY) trades 25 million shares, up 3.45 to 31.96. The food distribution firm surprised analysts with a 9% gain in its third quarter revenues with net earnings coming in at $258.5 million/

Sino Clean Energy (NASDAQ: SCEI) trades 6.3 million shares, up .28 to 2.38. It announced a $20 million share repurchase program.

Nuance Communications (NASDAQ: NUAN) trades nearly 9 million shares, up 1.63 to 21.72 with reports that Apple (NASDAQ: AAPL) is either seeking to buy or partner with the company. Speculation is AAPL seeks Nuance’s voice recognition technology.

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

Stocks/Underlying – Big Daily Change in Option Volume

Ryland Group (NYSE: RYL) trades 14,204 contracts, up about 2700% from recent days. RYL is down .17 to 16.51. Home builder and mortgage financier reported Friday a loss of $19.5 million for its most recent quarter.

Dollar Thrifty Automotive (NYSE: DTG) trades 22,134 options, up about 500%, as the stock climbs 9 to 78.70. Hertz (NYSE: HTZ) want to buy the company, offering a stick and cash deal valued at $72 a share. I’d buy it too if I could charge $9 a gallon for gas.

Mannkind Corp. (NASDAQ: MNKD) sees 13 times its typical option volume at midday with about 19,205 contracts traded. Most active call is the MNKD Jun 5 with 5500 options traded, according to Schaeffers Trading Floor blog. The biotech firm is scheduled to report its first quarter numbers today after the close.

Stocks/Underlying – High Option Volume

SPY has option volume of about 600,000 contracts as the SPDR trades up .56 to 134.76. The Standard & Poor’s Index Options (CBOE: SPX) is up 5.96 to 1346.16 on 164,314 contracts.

The iShares Silver Index (NYSE: SLV) trades nearly 500,000 options, as it rebounds 1.80 to 36.28.

The IWM is up on 174,334 contracts.

The CBOE Volatility Index (CBOE: VIX) is down 1.09 to 17.31 with 141,924 contracts traded on the Fear Gauge.

PowerShares QQQ Trust (NASDAQ: QQQ) trades 119,000 options.

Burney Simpson is the managing editor of InvestorPlace options pages.


Article printed from InvestorPlace Media, https://investorplace.com/2011/05/option-traders-turn-to-the-russell-2000-iwm-svl-spy/.

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