Intra-Day Significant Options Activity
Stocks Mentioned: BUD, CBST, ETFC, NITE, STI, WBSN, QCOM
With unconfirmed takeover rumors circulating in Anheuser Busch Companies Inc. (BUD, 50.65, +0.36%) opening bullish investors bought a total of 5,000 April and May calls, equating to over two times the average daily call volume. Some of the more notable trading includes opening investors buying approximately 2,000 April 50 (.74d) calls and 2,500 May 55 (.15d) calls.
In E*TRADE Financial Group (ETFC, 21.25, +0.14%) , order flow has generally been bearish over the last week and this morning the trend continued with buyers of 2,000 May 20 (.27d) puts. On Friday investors sold 7,000 July 22 puts, closing, versus buying 14,000 July 20 puts and separately sold 3,000 April 20 (.81d) calls. Some of the more notable trading over the past month has included April and July put buyers. ETFC is expected to report earnings the week of 4/9/07.
With earnings in Knight Capital Group Inc (NITE, 15.83, -0.06%) confirmed for 4/18/07, we are seeing buyers of both the April 15 calls and puts. Specifically, investors have bought ~2,400 April 15 (.72d) calls and about 1,400 April 15 (.28d) puts. Given the heavier volume in the calls, the order flow appears to have a bullish bias.
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In SunTrust Banks (STI, 80.95, -2.52%) opening investors are buyers of both calls and puts ahead of earnings on 4/17/07. In separate trading investors bought 3,000 April 80 (.25d) puts, 3,000 April 85 (.20d) calls, 1,000 April 75 (.10d) puts and 1,500 May 75 (.15d) puts. The order flow suggests investors are looking for notable movement in the upcoming weeks.
Options in Cubist Pharmaceutical (CBST, 22.78, +3.22%) are active today with sellers of May and buyers of August. Specifically, investors sold 1,100 May 22.5 (.50d) puts, bought 1,300 August 25 (.40d) calls and bought 3,500 August 15 (.05d) puts. Overall they are getting short volatility in May and long volatility in August, suggesting anticipation for increased volatility in the options after May expiration (5/19/07). Q1 earnings are after market on 4/18.
Order flow in Websense Inc. (WBSN, 22.91, -0.35%) indicated a bearish sentiment as investors bought approximately 1,500 April 25 (.84d) puts paying $2.20. These in-the-money put buyers are positioning for a downside move over the next several weeks. Last Monday, we also noted bearish trading as investors bought 2,000 May 25 (.67d) puts; while on Thursday investors sold downside volatility through 1,500 May 22 (.33d) puts with the stock trading lower. WBSN is estimated to report Q1 earnings on 4/27/07, which falls within the May expiration cycle.
In Qualcomm Inc (QCOM, 42.72, +0.12%) investors focused on buying upside April calls across multiple strikes this morning. In total, investors bought approximately 25,000 April 47.5 (.09d) calls and 10,000 April 45 (.23d) calls. These investors appear to be speculating on a significant near-term upside move. This is last week before the much anticipated April 9, 2007 deadline regarding the cross-license agreement between Qualcomm (QCOM) and Nokia Corp (NOK). Although QCOM has reiterated on numerous occasions that it does not anticipate reaching a resolution by April 9, 2007, investors may be looking to capture a last minute resolution.
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