Harry Winston Diamond Corp. (HWD) – Fresh prints in Harry Winston Diamond Corp. puts drove options volume in the front month above the prevailing level of overall open interest on the stock in the first half of the trading session. Shares in the specialist diamond company fell as much as 2.9% today to $10.36, bringing total declines in the stock up to roughly 43% since the end of May. The company was scheduled to present at the Telsey Advistory Group 2nd Annual Fall Consumer Conference just after 9:00 am EDT this morning.
One or more put players exchanged some 4,150 puts at the October $10 strike against zero open positions. It looks like most of the put options were sold for an average premium of $0.35 a-pop. Investors selling the contracts keep the full amount of premium as long as shares in Harry Winston exceed $10.00 through expiration next month. Heavy put selling pushed implied volatility on the Oct. $10 puts down more than 25% in early-afternoon trade. Shares in HWD have traded above $10.00 for more than one year, but did slip to as low as $9.61 in August 2010. Sellers of the puts likely expect shares in the miner of rough diamonds to resist above $10.00 through October expiration, and are happy to pocket available premium on the options in exchange for bearing the risk that the stock hits fresh lows in the next few weeks. Traders short the puts may have shares of the underlying stock put to them at an effective price of $9.65 each should the options land in-the-money at expiration day. Options implied volatility on the stock dropped 17.5% to 54.47% by 12:20 pm in New York.
Hasbro, Inc. (HAS) – Call options are in play on the provider of children’s and family entertainment products today, with shares in Hasbro up 0.95% at $34.78 just before 1:00 pm on the East Coast. It looks like one or more options traders may be positioning for shares in Hasbro to extend gains through expiration in January 2012. The company is scheduled to report third-quarter earnings ahead of the opening bell on October 17. Bullish positioning in Hasbro options is heaviest at the Jan. 2012 $37.5 strike, where more than 2,700 calls changed hands against previously existing open interest of 1,039 contracts. Most of the calls appear to have been purchased for an average premium of $1.45 a-pop. Buyers of the calls profit if shares in HAS surge 12.0% to surpass the average breakeven price of $38.95 by expiration day next year. Call buying spread to the higher Jan. 2012 $40 strike, where some 723 contracts were picked up at an average premium of $0.80 each. Open interest in calls at the Jan. 2012 $40 strike far exceeds volume of 1,015 contracts exchanged thus far in the session, suggesting trades today may or may not be opening. Options implied volatility on Hasbro rose 5.9% to 37.75% in early-afternoon trade.
Vishay Intertechnology, Inc. (VSH)–
The manufacturer and supplier of semiconductors and passive electronic components popped up on our ‘hot by options volume’ market scanner today after relatively large numbers of Jan. 2012 contract puts changed hands on the stock. Shares in Vishay Intertechnology are off their highest and lowest points of the day at present, to stand 0.70% higher on the session at $8.98 as of 1:10 pm in New York. Investors traded more than 4,000 in- and out-of-the-money put options on the stock this morning, and much of the volume appears to have been generated by sellers. Roughly 2,050 puts were exchanged at the Jan. 2012 $7.5 strike for an average premium of $0.60 each, while another 2,040 in-the-money puts traded at the higher Jan. 2012 $10 strike at an average premium of $1.84 apiece. The majority of the puts appear to have been sold, but some portion of total volume traded to the middle of the market. One block of 629 in-the-money $10 strike puts traded on the ask at a premium of $1.85 each around 11:00 am this morning, but far more of the volume appears sold. Sellers of the puts are prepared to keep premium received today as long as shares exceed the strike prices described through expiration day next year. Vishay reports third-quarter earnings ahead of the open on November 1.