Friday Options Recap

by: Frederic Ruffy


Trading has stalled and the major averages are almost flat heading into the final 90 minutes of trading in 2010. There has been little news to guide trading. Both the earnings and economic calendars are empty. While some investors are squaring away positions before the yearend, many are already gone for the weekend. The Dow Jones Industrial Average has traded in a 67-point range and is up 4 points. The tech-heavy NASDAQ has added 2. The CBOE Volatility Index (.VIX) edged up .34 to 17.86. Overall options volume is light, with 4.1 million calls and 2.9 million puts traded so far.


Bullish Flow

Abbott Labs (NYSE:ABT) adds 43 cents to $48 and 3,572 Jan 48 calls have traded so far. It includes a lot of 500 at 63 cents on ISE and is an opening customer buyer, according to ISEE data. The stock was listed on a Seeking Alpha story today titled “Ten Stocks Expected to Grow Their Dividends in 2011." 5,850 calls and 2,350 puts traded in the name.

From Henry Schwartz. Imax shares are rockin the new years eve, spiking more than $5 at the open to a new 52wk high of $32.30 on an unconfirmed Sony (NYSE:SNE) deal. Shares have since slid back to the $30 range, and option volume is 6x normal with a total of 3600 Jan 35 calls leading the most actives. Vols are up nearly 20 points to about 60% at the Jan. 30 strike. The extremely ‘lucky’ customer who bought a block of 5000 March 30 calls bought on Tuesday 12/28 for 70cents vs $25.04 (try command IMAX -3 to view) is currently up about $600k.

Bearish Flow

The top options trade so far today is a block of 50,000 Citi (NYSE:C) Jan. 4.5 puts at 6 cents per contract on CBOE. It was bought, according to a source on the floor. Shares are off 3 cents to $4.74 and this might be a short-term hedge or an outright bearish bet. It might also be a closing trade, as open interest is 259K.

Implied Volatility Mover

After a two-day 54 percent surge, Qiao Xing Universal Resources (XING) shares are giving back 12 cents to $2.73 and options volume is 3X the average daily. 3,200 calls and 1,005 puts traded so far. Jan 2.5 calls continue to see interest, with 950 traded. Jan 2.5 puts are also seeing interest. 870 changed hands. Implied volatility is down 3 percent, but at 128.5 remains elevated and reflects expectations that the volatility in XING will continue into 2011. Actual (30-day) is 126.5 percent.

Unusual Volume Movers

Bearish activity detected in Northern Oil and Gas (NYSEMKT:NOG), with 2333 puts trading, or 3x the recent avg daily put volume in the name.

Bullish flow detected in Synovus Financial (NYSE:SNV), with 4840 calls trading, or 5x the recent avg daily call volume in the name.

Bullish flow detected in IMAX, with 21804 calls trading, or 16x the recent avg daily call volume in the name.

Increasing volume is also being seen in Anadarko Pete (NYSE:APC), Rare Element (NYSEMKT:REE), and Savient Pharmaceuticals (OTC:SVNT).