Options Flow Summary: General Sentiment & ADI
The markets are higher this morning as the liquidity measures provided by US and European authorities alleviate fears of capital crises. The CBOE VIX is down to 25.69 and the volume is relatively light with 2.6 million puts and 2.8 million calls traded by noon.
The majority of the flow in single stock options is focused on at-the-money and out-of-the-money calls. Premium sellers are attempting to capitalize on the higher premiums paid in the current high-volatility environment.
Analog Devices (ADI)
There has been unusual option volume trading in ADI today, with 7900 contracts traded. This is triple the average daily level for this product. The stock is up .8%, in line with the market, to $38.03. The volume is concentrated in September 35 and 40 calls. The flow indicates consistent buying of the September 40 calls. ADI is expected to report earnings on August 21st and these call buyers may be positioning for better-than-expected numbers.
Unusual volume was also seen in the longer-dated Jan-08 40 calls last Thursday. At that time 10,000 traded for $3. That trade was shown to be closing a position opened in late May for $2.20 when the stock was a bit lower.
View Henry Schwartz's post archive >