Too Many Options: Single Stock Story Day

by Enis November 13, 2012 4:50 pm • Commentary

A lot of individual stories in an up and down day in the markets.  Here are the top 10, with the first 3 thanks to Kristen:

  1. SPLS – Implied volatility is up with earnings coming up on the 14th before the open. There was a spike in volatility on the 7th as with the rest of the market but also interest in relation to good earnings in Office Depot on the 6th. Stock price has been drifting down since thenGraph courtesy of LiveVol.  Red 30d IV, Yellow 60d IV, light blue 30d HV, blue 60d HV

    3500 Dec 13 calls and puts traded. The calls were in the middle of the market and the puts closer to the bid. It could have been a conversion or reversal related to the next dividend cycle in December. News sentiment seems to be that Staples is doing some of the same things as Office Depot that could improve revenue but that it also has more exposure to the tech cycle and perhaps has not been aggressive enough about making profit-margin improvements.

  2. DMND – Stock up $2 and IV30 up over 16 points. Over 12K options have traded under 2K average. They announced that they will release the restated financial results from the first 3 quarters of 2012 as well as discuss in a conference call the restated results of 2010 and 2011 after the accounting scandal, Walnutgate, last year. DMND products include Pop Secret popcorn, Emerald snack nuts and Kettle chips.  Check out this nutty vol skew!

    Chart courtesy of LiveVol.

  3. RHT – Red Hat, open source software, had some big trades in the Dec 52/55 calls 8600 by 6000 times which traded and the Jan’13 47/50 calls 2500 times. In each case except the Jan’13 50’s, open interest was quite a bit smaller than the trade. The Dec call spread traded right in the middle of the bid and offers but the Jan looks like it was bought. BMO cut their price target yesterday.  RHT announced they will be holding a webcast tomorrow at 12:30 to provide an update on their storage strategy and technologies. IV30 and stock price seem unaffected.
  4. PCS – Someone sold 30k of the Nov 10 puts at 0.15 to buy 30k of the Feb 10 / 9 put spread paying 0.50, rolling their protection out.
  5. FB – The Nov puts were very active as everyone positions ahead of the lockup expiry tomorrow.  More than 50k of the Nov 19 and 19.5 puts traded.
  6. CSCO – The most traded line ahead of earnings was the CSCO Jan13 19 calls, which traded mostly in the afternoon, averaging 0.135, more than 30k times
  7. INTC – Stock near 2 year lows around 19, selling off another 2%.  The Dec 22 calls traded more than 30k, with the bulk of it looking like buying, with an average around $0.16
  8. MBI – The stock slid almost 20% by the close on headlines that BAC was looking to block the insurer’s debt amendment.  The Nov 7 puts traded more than 7, with the average price around 0.25; those options closed at 0.48 by the close.
  9. DTG – The merger with HTZ is set to be approved by the FTC, but the stock has seen some renewed concerns in the past month, sending DTG on a wild ride.  Options were 5x normal volume today, with puts 2x more active than calls.
  10. MSFT – Most active single name today, on news of the departure of Windows chief Steven Sinosky.  The April 29/ July 28 call spread traded 61K by 35K. The Nov/Dec 30 put spread traded 22K at $.03.  The Jan’13 29 calls traded a 10K lot and a 5K lot for $.34.