Sentiment
Stock market averages are holding modest gains on hopes for Greece after Prime Minister Papademos said his country had struck a deal with creditors Thursday. The agreement must clear the approval of finance ministers, but is an important first step in avoiding a Greek default next month. The euro has moved back towards 1.33 against the buck and European equity markets finished narrowly mixed. The US economic news remains light and included a better than expected reading on jobless claims, which fell by 12,000 to 358,000 last week. Separate data showed Wholesale Inventories up 1 percent in December. The economic news didn’t seem to matter much and the earnings news remains mixed. Technology bellwether Cisco is down 47 cents to $19.96, but the tech-heavy NASDAQ is forging a 12-point gain. The Dow Jones Industrial Average is up 17 points. With an hour left to trade, the CBOE Volatility Index (.VIX) added .28 to 18.44. Trading in the options market is running about the typical levels, with 7.7 million calls and 6.1 million puts traded across the exchanges thus far.
Bullish Flow
Bunge (BG) is jumping on earnings in early-trading Thursday morning, up $2.69 to $62.43, and morning trades on the stock include a multi-exchange sweep of 5,841 Jul 67.5 calls for $1 per contract. It’s possibly an opening buyer. Separately, a sweep of 4,000 Jul 70 calls traded at 70 cents, when the market was 65 to 90 cents and is possibly opening call writing. 10,000 calls and just 67 puts traded in the early minutes Thursday and levels of implied volatility are down 24 percent to 24.
Blackstone (BX), which saw rolling activity out of Jan 15 calls to Jan14 20 calls two days ago, is seeing interest again today. This time, the top trade is a 7,060-lot of Jan14 22 calls for $1.12 when the market was 94 cents to $1.13. Looks like another bullish longer-term play on the New York based asset manager. 7862 trade so far.
Bearish Flow
Microsoft (MSFT) loses 7 cents to $30.59 and is one of 14 Dow stocks trading lower, as the mixed trading continues for another day Thursday. Morning options trades on MSFT include a 15000-contract block of Jul 26 puts at the 46-cent asking price. It was tied to 240K shares at $30.65 and might close an existing position. On the other hand, the apparent put purchase might be a new position to hedge recent gains in the stock. MSFT is off a bit today after rallying 17.9 percent year-to-date and notching a new 52-week high of $30.75 earlier today.
Implied Volatility Mover
Yingli Green Energy (YGE) adds 64 cents to $5.54 on volume of 12.5 million shares, which is more than 3X the typical volume through midday. Shares hit a high of $5.85 this morning on no news. Meanwhile, options action is heating up in the name as well. 12,000 calls and 2,215 puts traded on the stock. March 5 calls, which are 54 cents ITM and expiring in 36 days, are the most actives. 4,827 traded (93 percent Ask) against 2550 in open interest. Feb 5 and Feb 6 calls are seeing interest as well and implied volatility in YGE options is up 21 percent and elevated at 99. Earnings are expected, but not confirmed, around Feb 17 – which is expiration Friday.
