Monday Options Recap

 |  Includes: BBRY, CHK, MRVL
by: Frederic Ruffy


Stock market averages pared midday losses and are little changed on a light news day Monday. With no economic data on the docket till Wednesday, there wasn’t much new to guide the early action. It’s a busy week of earnings news, but the deluge of reports doesn’t begin until after the closing bell today. In overseas action, the euro recaptured 1.30 against the buck and UK’s FTSE paced a modest advance in Europe with a gain of .9 percent. Gold gained $11.9 to $1675.9 and crude recaptured $1.48 to $99.81. Meanwhile, trading is uninspired on Wall Street and the Dow Jones Industrial Average is off 2 points. With thirty minutes left to traded, the NASDAQ is down 2.5 points. CBOE Volatility Index (.VIX) edged up .42 to 18.70. Trading in the options market is active, with 8.3 million calls and 6.8 million puts traded so far.

Bullish Flow

CHK Chesapeake (NYSE:CHK) gains $1.09 to $22.05 and options on the stock are actively traded Monday morning. Natural gas prices, which have been spiraling to decade lows, are up 9 cents to $2.43 after Chesapeake, the second largest natural gas producer in the United States, updated its 2012 operating plan and announced production cuts to lift prices. 22,000 calls and 8,511 puts traded on CHK. The top trade is a 2,500-lot of Jan13 $30 calls at the $1.22 asking price. 4,478 traded. Feb 22 calls, 21 puts, 23 puts, 23 calls, and 24 calls on CHK are seeing active trading as well and implied volatility in the options on the stock has eased about 8 percent to 40.

Bearish Flow

RIM (RIMM) is down $1.30 to $15.70 and forfeiting some of the 35 percent gain since the 52-week low one month ago. The Blackberry maker came under fire this morning on the unexpected departure of two co-CEOs and after RIM said it was focusing on its product line rather selling off part of the company. Options on the stock are actively traded, but sentiment seems mixed. 77,000 calls and 94,000 puts. May 16 put buyers surfaced early to drive some of the morning flow. 22,650 now traded. A Mar 13 - 19 bearish risk-reversal was apparently sold on the stock at 18 cents, 2000X. However, the top trade is an Apr - May 16 call spread, apparently bought for 20 cents, 10000X. This timespread looks opening and a bet that shares will hold around $16 through the April expiration, in 88 days. Meanwhile, implied volatility in RIM options has ticked 4.5 percent higher to 67, but a far cry from the extremes above 85 seen in the Fall.

Implied volatility Mover

Marvell Tech (NASDAQ:MRVL) sees heavy trading. The stock is up 34 cents to $15.87 on 11.7 milllion shares. Typical volume for the stock through midday is 6.8 million shares. Meanwhile, 32,000 calls and 4,070 puts traded in MRVL. February 16 calls are the most actives. 15,111 traded (58 percent Ask) against 13,084 in open interest. Weekly 16, Feb 17 and Mar 18 calls are seeing interest as well. No news on the ticker and implied volatility is up 12.5 percent, to 39, as upside call buyers seem to dominating the action in the chipmaker today. Earnings were last reported on 11/17