(Corrects date of release of December sales results to Jan. 3)
Real-time equity news [E U]
U.S. stock market report
1330 ET 24Dec2012 Ford option trading turns busy, weeklies eyed
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Option activity on Ford Motor Co turned busy, with traders stepping
into its Weekly puts and calls. WhatsTrading.com options strategist Frederic
Ruffy said a multi-exchange sweep of 11,644 Weekly $13 strike calls expiring on
Jan. 4, traded for a dime per contract.
Data from the International Securities Exchange reported an opening customer
buyer for these short-term contracts. In all, the $13 strike call carried 18,791
contracts traded against 5,700 in open interest, Trade Alert data show.
In addition, Weekly $12 strike puts and calls expiring this Friday are
seeing interest, as are the January $11 and $12.50 strike calls, Ruffy said.
Overall trading is brisk, consisting of 116,000 calls and 65,000 puts changing
hands on Ford near the close of the shortened pre-Christmas session, according
to Trade Alert. The activity was accompanied by a lift in implied volatility for
Ford options. It rose 2.5 percent to 33 percent, according to Ruffy. “It’s not
clear why investors are revved up about Ford options and shares on Monday, as
there are no headlines on the ticker,” Ruffy said. Ford will release auto sales
results for December on Jan. 3. Its s h ar es were up 4.55 percent to $12.40.
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1257 ET 24Dec2012 DirectTV March call trade positions for upside
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Shares of satellite TV provider DirecTV slipped 15 cents to $50.11
during Monday’s abbreviated trading session. On the options front, it appears a
call buyer is anticipating share price gains within the next three months.
Options volume on DirecTV is nearly five times the daily average after a
35,000-lot of March 2013 $55 strike calls was bought on the stock for 73 cents
per contract, which appears to be a new position and not tied to stock, said
WhatsTrading.com options strategist Frederic Ruffy. The shares hit 52-week highs
of $54.17 in mid-September, fell to a low of $48 two months later, and have been
rangebound since then. “Today’s hefty upside call buyer is possibly anticipating
a leg higher through the first quarter,” Ruffy said.
Options volume on DirectTV consisted of 37,000 calls and 814 puts traded so
far on Monday, according to Trade Alert.
Reuters Messaging:
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1119 ET 24Dec2012 Weekly options on Facebook, Penney and Arena draw interest
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Option activity is expectedly light in Monday’s shortened trading session
ahead of the Christmas holiday on Tuesday. But there is some bullish activity in
the weekly contracts that expire at Friday’s close, said optionMonster analyst
Mike Yamamoto in comments on the firm’s website.
In Facebook he noticed early buying popped up in the Dec. 28 $25.50
strike calls, with 4,157 contracts trading mostly for $1.10 apiece against open
interest of just 135. “This morning Needham raised its price target for the
social-networking stock to $33 from $25, citing growth in mobile-revenue
estimates,” Yamamoto said. Facebook shares rose 2.35 percent to $26.88.
J.C. Penney Co Inc is drawing buyers in its December $20 strike
calls, which have traded 3,404 contracts with premiums rising from 50 to 80
cents against open interest of 1,469, Yamamoto said. The shares were up 2.50
percent to $20.08.
And in Arena Pharmaceuticals, bullish action is seen in its
December $9 calls, which traded 1,045 times as premiums rose from 10 to 15 cents
per contract, he said. Arena shares gained 1.85 percent to $8.80.
Reuters Messaging:
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1044 ET 24Dec2012 Goldman Sachs recommends Aeropostale January strangles
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Goldman Sachs Group advised clients to buy January 2013 strangles on teen
apparel retailer Aeropostale Inc to position for a potential large stock
move on a December sales update slated for early January. “We expect ARO to
provide its Holiday Sales update on January 10, 2013,” Goldman Sachs strategists
wrote in a note. Goldman believes the details on sales, and potentially an
update on the quarter, could be more stock moving than the market anticipates.
Since 2004, the shares have moved 4 percent, up or down, on December sales
updates. After ending monthly sales updates this year, the retailer preannounced
earnings twice, averaging a stock move of minus 18 percent, Goldman said.
Specifically, Goldman recommends the January ARO $12.50-$14.00 strangles
which could be bought for 6 percent of the recent stock price at $13.13. The
trade provides an investor with exposure to a move in either direction until
January expiration, with a potential profit range of shares down 11 percent or
more, or up 13 percent by expiration. Goldman believes the high level of debate
on the company’s fundamentals and growing competition increase the likelihood of
shares moving in a meaningful way on Aeropostale’s scheduled holiday update. The
average daily move for shares is 2 percent. Strangle buyers risk loss of the
premium paid if the stock price is between the strike prices at expiration.
The shares fell 33 percent on their Aug. 2 preannouncement, down another 11
percent on August earnings, and down 5 percent on November earnings. Forward
looking option prices on Aeropostale appear too low ahead of an expected
quarterly update. One-month implied volatility is trading at a discount to
one-year average levels and is below one-month and three-month realized
volatility.
Reuters Messaging:
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0934 ET 24Dec2012 Total option open interest stands at 5 mln contracts
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A total of 20.2 million option contracts traded on Friday, resulting in net
open interest growth of 2.24 million calls and 2.76 million puts, according to
Trade Alert. Friday marked the quarterly expiration of December stock index
futures and options, stock options and single stock futures contracts.
Apple Inc, Bank of America Corp, Citigroup Inc and
Research In Motion Ltd attracted the greatest growth in open
positions, data from Trade Alert show.
The top five new positions opened were 29,000 Citigroup January 2013 $40
strike puts, 28,000 Citigroup January $40 strike calls, 26,000 KeyCorp
March 2013 $8 strike calls, 25,000 KeyCorp March $7 strike puts, and 19,000 Ford
Motor Co June 2013 $11 strike calls, Trade Alert said.
Reuters Messaging:
