Mid-day Flow Summary
Mid-day Flow Summary, 13 April 2007 12:00 ET
Pfizer (PFE)
Pfizer (PFE) options are among the most active in the market today. Earnings are due next Friday and the trading this morning suggests there is potential for an upside surprise. The stock is trading near $26.75 and we’ve seen buyers of 10,000 June 27.5 calls and sellers of 25 strike puts that expire in Jan-08.
Electronic Data Systems (EDS)
Also notable this morning is continued speculative flow in Electronic Data Systems (EDS). Over the past 5 trading days, 17,000 at-the-money calls and 19,000 out of the money calls have traded with a buyer-initiated bias. Call open interest has also grown from 52,000 calls to 83,000 calls.
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Yahoo (YHOO) & Apple Computer (AAPL)
Yahoo (YHOO) and Apple Computer (AAPL) are dominating the technology options today with a bias towards call selling and put buying.
In Yahoo, a customer sold 50,000 July 20-25 call spreads on the PHLX for a $4.60 credit, which works out to (if unhedged) an upside risk of $2 million versus a potential $23 million gain if the stock closes below $20 at July expiry.
In Apple, the July 85 puts are the most active today. Over 15,000 contracts have traded as part of a buy-put, sell-call risk reversal and a July-Jan 85 put spread.
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About Henry Schwartz
Henry Schwartz has traded derivatives on US and European exchanges for nearly 20 years. His experience includes market-making and institutional trading at the Hull Group, Salomon Brothers, Bear Stearns and most recently Banc of America Securities, where he led the electronic market-making project coincident with the launch of the ISE. His current work involves real-time stream analysis of options market activity for a number of leading institutional sell-side firms.
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