Friday Options Recap: No Fireworks

by: Frederic Ruffy


The Quadruple Witch Expiration failed to stir any fireworks Friday, as a disappointing reading on consumer sentiment was offset by positive news from the technology sector. Today's economic news included a hotter-than-expected CPI print (.4 percent vs. .3 percent consensus) and a weaker than expected University of Michigan Consumer Sentiment Index, which fell to 66.6 in September and below expectations of 70.0. The data didn't have much impact, however, as the tech sector is holding gains after both Oracle (NYSE:ORCL) and Research In Motion (RIMM) delivered better than expected results after the close of trading Wednesday. Consequently, with less than an hour left to trade, the Dow Jones Industrial Average is up 5 points, but the tech-heavy NASDAQ has added 12. The CBOE Volatility Index (.VIX) is up .07 to 21.79. Trading in the options market is very active due to the expiration. Approximately 7 million calls and 6.3 million puts traded so far.

Bullish Flow

Texas Instruments (NYSE:TXN) shares are up 46 cents to $25.44 early Friday after the chipmaker said late Thursday it's planning a $7.5 billion share buyback and raising its dividend by 8 percent. Early options trades Friday include a put seller in the January 2011s, collecting $1.11 on the Jan 24s, 2500X, and 70 cents on the Jan 22.5s, 5500X.

Iron Mountain (NYSE:IRM) adds 25 cents to $20.50 and options volume is 20X the normal after the Sep - Oct 20 put spread is apparently sold at 40 cents, 12000X. Looks like a roll of a position opened on 8/24 when 12000 Sep 20 puts traded on the 25-cent bid. Rather than let those puts expire worthless, this strategist appears to be offsetting the position at a dime and now opening a new position in the Oct 20 puts, selling 12000 at 50 cents each.

Bearish Flow

Bearish activity detected in Tyson Foods (NYSE:TSN), amid relative weakness in the meat companies today (Smithfield Foods (NYSE:SFD), Sanderson Farms (NASDAQ:SAFM), Pilgrim' Pride (NYSE:PPC)) after corn futures surged Friday. 10645 puts traded on Tyson, or 19x the recent average daily put volume in the name. Shares are down $1.02 to $16 and Jan 15 puts are the most actives, with 5827 traded and 81 percent trading at the ask. Looks like buyers of Jan 12.5, 14, and 16 puts as well. Implied volatility is up about 10 percent to 34.

Implied Volatility Mover

Bullish flow detected in Intrepid Potash (NYSE:IPI), with 8895 calls trading, or 3x the recent average daily call volume in the name. Shares added 57 cents to $26.40 and Oct calls with strike prices ranging from 26 to 29 are seeing the bulk of the flow. Implied volatility is up 6.5 percent to 48. Looks like speculative call buying. It might be a sector play following today's rally in corn futures (up 3.4 percent.)

Unusual Volume Movers

Bearish activity detected in Teradyne (NYSE:TER), with 4139 puts trading, or 5x the recent average daily put volume in the name.

Bullish flow detected in AsiaInfo Linkage (NASDAQ:ASIA), with 3519 calls trading, or 13x the recent average daily call volume in the name.

Bullish flow detected in Keryx Biopharmaceuticals (NASDAQ:KERX), with 3171 calls trading, or 9x the recent average daily call volume in the name.

Increasing options action is also being seen in Huntsman (NYSE:HUN), Qualcomm (NASDAQ:QCOM), and Iron Mountain (IRM).