Thursday Options Recap

Includes: FB, HUN, QCOM
by: Frederic Ruffy


Overall options volumes remain surprisingly through midday-Thursday prior to a Quadruple Witch options expiration. 2.9 million calls and 3.1 million puts traded in the first two hours . The projected volume, of 14 million, is about 88 percent the average daily, according to Trade Alert data. It's the last day to trade June S&P 500 options and, although open interest in June SPX options is 5.4 million contracts (36 percent of the total open interest in the product), volume is running below normal in the SPX pit as well. 125,000 calls and 190,000 puts so far. The lighter volumes might be related to the whippy market action. After sliding 16.7 points Monday, the S&P 500 gained 14.9 points Tuesday, only to fall 9.3 points yesterday. SPX is up 10.7 points today, bringing its weekly change to about +1 points. The S&P is also at the same levels as it was one month ago.

Still, while volumes are light this morning, they are likely to pick up this afternoon and into expiration Friday. VIX is down .54 to 23.73. Crude is up .69 to 83.31 as OPEC meets today and gold gained $4.5 to $1624. The ten-year is losing a bit of its flight-to-safety bid, falling 12 ticks, as the Athens General Index surged 10 percent in front of Greek elections...and investors also look towards a Jun 20 FOMC meeting for Fed officials to signal another extension of Operation Twist.

Bullish Flow

Huntsman (NYSE:HUN) sees a spike about an hour ago and is up $1.11 to $12.98 on heavy volume approaching 20 million shares. Meanwhile, speculators are all over Hunstman call options like a cheap suit, with 18,000 calls and 835 puts traded on the Salt Lake City-based chemicals company. June 12 calls, which are now almost $1 in-the-money and expiring after tomorrow, are the most actives. 5,485 traded. Jun 13, July 13, and July 14s are busy as well and 30-day ATM vols are up 10.5 percent to 10.5. Reuters is out with a headline that BofA is shopping the company, but there's little interest.

Bearish Flow

Facebook (NASDAQ:FB), which saw total open interest climb to more than 1 million contracts with help from hefty put buying yesterday, is seeing relatively light volume today. 19,000 calls and 29,000 puts so far. The projected volume is 144K and well off the recent pace of 239K. Shares are up 44 cents to $27.71 and the top trades are an Aug 21 - 28 put spread for $2.45, 4270X on ISE. A customer bought the spread, to open, according to ISEE. If so, it's a bearish play with a max payout if shares fall to $21 or less through the August expiration, which represents a 24.2 percent plunge over the next 64 days.

Implied volatility Mover

Qualcomm (NASDAQ:QCOM) is under pressure, falling $2.39 to $56.55, in active trading of 23 million shares after Nokia announced plans to slash the prices of its new Lumina smartphone. Qualcomm provides the chips that help drive the Lumina windows operating system. QCOM options are busy and the stock is one of the big implied volatility movers of the day. 49,000 calls and 29,000 puts so far. The top trade is a 5000-lot of Oct 65 calls for $1.51 when the market was $1.46 to $1.51. June 57.5 calls, July 60 calls and Jun 57.5 puts are the most actives in the name and 30-day ATM vols jumped 21 percent to 35.