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Sentiment

Stocks are holding modest gains on positive economic data Monday. The table was set for gains after the Labor Department reported Friday that the US economy added 162,000 jobs in March, which was not as much as economists had predicted, but the most since December 2007. Meanwhile, separate data released Monday morning showed the ISM Index up to a better-than-expected 55 in March and pending homes sales rising a much stronger 8.2 percent in February.

The Dow Jones Industrial Average moved higher on the data and is up 34 points late Monday. With less than an hour left to trade, the NASDAQ added 23. The CBOE Volatility Index (.VIX) is down .14 to 17.33. Trading in the options market is on the light side, with about 5.3 million calls and 4.1 million puts traded so far.

Bullish Flow

Harley Davidson (NYSE:HOG) is up $1.86 to $30.24 after RBC Capital raised their price target on the motorcycle maker to $36 from $32. They believe that, with a credible restructuring plan in place, HOG will outperform as visibility improves and investors gain confidence. Options are seeing brisk trading as well, with 26K calls and 9415 puts traded so far. May 29 – 31 call spreads traded, 2400X, on the ISE and looks like sellers, maybe rolling up bullish positions from the ITM to OTM calls. Meanwhile, implied volatility is up about 8 percent to 38.5.

Overstock.com (NASDAQ:OSTK) rallied more than 30 percent on earnings Thursday and is up another 7 percent to $18.08 today. In the options market, bullish trading is being seen as well, with 3321 calls traded, or 3x the recent avg daily. The action is focused on April 15, 17.5 and 20 calls. June 20 calls are seeing interest as well and implied volatility is up about 7 percent to 55. OSTK reported its first ever annual profit last Wednesday and, in the conference call, CEO Pat Byrne lashed out on short sellers, "crooked" hedge funds and regulators. "We've got a group of parasites who have found a loophole that they can keep on using to just drain resources out of entrepreneurs in America, and in the process kill small companies," according to Byrne.

Bearish Flow

Shares of Net 1 Ueps Tech (NASDAQ:UEPS), a Johannesburg based electronic payment systems provider, sank 9.5 percent and options volume rose to 24X the average daily levels Thursday. The action included 4000 April 17.5 combos and appears to have closed out an existing position (bot calls, sold puts). Meanwhile, 5000 July 17.5 puts were apparently bought-to-open at $1.40 each. In short, looks like a bearish position rolled from April to July, with an investor possibly bracing for additional downside after Thursday's slide. The company is currently in contract negotiations with South African Social Security Agency — which accounts for about 65 percent of its revenues.

Implied Volatility Movers

Eastman Kodak (EK) jumped at the open on talk of a positive newsletter writer and is making a run to session highs on increasing options volume. Shares are now up 80 cents to $5.79 and options activity is running 5X the average daily. 29K calls and 5350 puts traded. April and May 7 calls are the busiest, as players position for additional upside. April 6 calls, April 8 calls, April 6 puts, Jan $10, and May 8 calls are busy as well. Implied volatility rallied 12 percent to about 73, as it seems some investors expect the gyrations in EK shares to continue in the short-term.

Unusual Volume Movers

iShares Emerging Markets Fund (NYSEARCA:EEM) is seeing 2X its average daily volume, with 435,000 contracts traded and put volume accounting for 69 percent of the day's activity.

Sandridge (NYSE:SD) options volume is running 9X the average daily, with 99,000 contracts traded and call volume accounting for 60 percent of today's volume.

Cree (NASDAQ:CREE) options volume is two times the usual, 36,000 contracts traded and call volume representing 53 percent of the activity.

Unusual volume (two times or more than normal average volume) is also being seen in International Game Tech (NYSE:IGT), PNC Financial (NYSE:PNC), and Lowe's (NYSE:LOW).

Source: Monday Options Recap