Major averages are holding gains with help from better-than-expected earnings. Intel (INTC), JP Morgan (JPM) and CSX all reported results that topped Street estimates. While the reaction is mixed (JPM and INTC are down), the results seemed to ease some pre-earnings jitters ahead of the reporting season, which gets in full swing next week. Meanwhile, the economic news has been light over the past few days, but things could get more interesting, with jobless claims and PPI tomorrow. Friday holds manufacturing, retail sales and UofM consumer sentiment numbers. For now, however, the focus is on earnings and the Dow Jones Industrial Average is up 110 points heading into the final half hour. The NASDAQ added 29. The CBOE Volatility Index is off .06 to 18.87.
Sirius Satellite (SIRI) touches a new 52-week high and is up 7 cents to $1.42. Options action is picking up, with about 33K calls and 6,300 puts traded on the ticker so far. December 1.5 calls are the most actives. 8,015 traded (75 percent Ask). Looks like buyers are dominating the action in the Jan12 $2, Jan 1.5, and Jan12 $1 calls. Meanwhile, Jan12 $1 puts have traded 4,594X (71 percent bid). Implied volatility is down about 3.5 percent to 53. The strength in shares and increasing options action comes after the company announced that it added 334K new subscribers in the third quarter.
Trading is active in the exchange-traded funds, with 1.6 million puts and 1.2 million calls traded across all products through midday, or almost twice the expected. Among the notable trades: In the Qs (QQQQ), one player bought 46,000 Jan 47 puts at $1.23 each. The Financial Select Sector Fund (XLF) saw a seller of 50,000 Oct 15 calls at 12 cents each. A block of 30,000 Nov 114 puts was bought on the SPYders (SPY) at $1.41 apiece. Another investor bought 16000 SPY Dec 116 puts, sold 24000 SPY Dec 110 puts and sold 7000 Dec 108 puts, creating a bearish spread with a max pay-off if shares fall to $110, or about 1100 for the SPX. So, while major averages are rallying, some of the big prints in the ETFs today seem somewhat defensive or bearish.
Implied Volatility Mover
Great Atlantic and Pacific Tea (GAP) is off 52 cents to $3.46 and options order flow is bearish on reports the company is looking to restructure its debt. Morning trades include a buyer of 4,000 May 2 puts at 50 cents per contract. Looks opening. 4,625 now traded vs. 1,528 in open interest. Oct 2, Nov 2.5, Jan 2.5, and Jan 4 put options are seeing interest as well. 8,347 puts and 630 calls now traded in the name. Implied volatility is up 36 percent to 135.
Unusual Volume Movers
Bullish flow detected in Taseko Mines (TGB), with 9270 calls trading, or 3x the recent average daily call volume in the name.
Bearish activity detected in AMAG Pharmaceuticals (AMAG), with 2174 puts trading, or 2x the recent average daily put volume in the name.
Bullish flow detected in Hartford Financial Services Group (HIG), with 23932 calls trading, or 3x the recent average daily call volume in the name.
Increasing volume is also being seen in MGM, SanDisk (SNDK), and CSX.