Real-time equity news [E U]
U.S. stock market report
1459 ET 18Apr2012 Avon option combination play suggests gains
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Avon Products Inc shares fell $2.39 percent to
$22.02 late on Wednesday but in the options market, some traders
appear to be betting on share price gains in the months ahead.
A January 2013 $17.5 put-$25 call bullish risk-reversal was
bought on the stock for 10 cents, 4,000 times, according to
WhatsTrading.com options strategist Frederic Ruffy. It appears
to be a new position and comes after shares jumped two weeks ago
on news the company rejected Coty’s $10 billion offer. Coty has
not raised its offer price. Coty Inc on Monday urged Avon
shareholders to ask their company to give Coty a look at inside
information, which would give the private cosmetics company a
chance to then offer its best price.. The
risk-reversal is possibly a bet that the stock will move to more
than $25 per share by mid-January 2013.
Another noteworthy trade in the stock is a 10,150-lot of
January $22 calls at $2.10 when the market was $2.05 to $2.30
and is possibly a closing trade tied to 548,000 shares for
$22.21, Ruffy said.
Reuters Messaging:
doris.frankel.reuters.com@reuters.net
1309 ET 18Apr2012 April VIX futures settle at 19.06 Wednesday
morning
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The April VIX futures settlement came in at 19.06, a price
that expiring April VIX options will be priced off of, said
optionMonster analyst Chris McKhann on the firm’s website.
The CBOE Volatility Index, or VIX, the implied
volatility measure of the S&P; 500 Index, rose 2.38
percent to 18.90. “The VIX did pop up as high as 19.17 this
morning, but the spot VIX and settlement calculations are
different,” McKhann said. “We do see about 300,000 SPX options
trade this morning, which can effect the settlement price.”
The settlement comes from traded prices of SPX options as
opposed to the cash VIX, which is calculated using the
mid-points of the bid/ask spread for SPX options.
The May VIX futures, now the front month, was higher at
20.40, and the June futures edged up to 22.08. Those two front
contracts are trading at a premium to spot VIX and will mean
that long VIX exchange-traded products “will suffer from
contango and roll headwinds,” McKhann said.
Reuters Messaging:
doris.frankel.reuters.com@reuters.net
0700 ET 18April2012-Economic and earnings diary for April 18
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Companies scheduled to report quarterly results on Wednesday
include American Express Co, eBay Inc and
Qualcomm Inc, among others.
There are no major economic indicators on tap.
Reuters Messaging:
@reuters.net
