Mid-Day Options Order Flow: General Sentiment, Qualcomm (QCOM), Intel (INTC) & Crocs Inc. (CROX)
Mid-day Flow Summary, 17 October 2007
General Sentiment
There was a strong start to the day as better-than-expected earnings from JP Morgan, Intel and Yahoo lifted broad averages nearly 1% at the open.
At midday, the gains have faded slightly as investors begin taking profits. The options markets are very busy as traders roll their positions ahead of Fridayís expiration. Many traders are also preparing for additional waves of earnings announcements later in the month.
QCOM
By noon, the largest single stock trade is a spread in QCOM options on the Amex. In this trade, a seller collected $3.34 15,000 times (totaling just over $5 million) to sell the January 08 40-55 call spread. The trade was tied to stock that the executing firm positioned.
With the stock currently trading at $41.21, the seller may be adjusting his existing exposure. This position will perform best if the stock stays away from the 52 week high of $47.72 which was hit in May of this year.
Intel (INTC)
We are continuing to monitor interesting activity in Intel after the earnings beat analyst estimates. The stock is up 4.6% to $26.66 at noon and buyers are active in the October 27.5 calls. Nearly 34,000 contracts have changed hands so far today.
Yesterday we saw net sellers in this contract. The open interest numbers confirmed that much of this volume consisted of new positions. The premium collected on these trades was in the $.13 range. Despite the stock rise, those sellers appear to be covering their shorts for a gain of nearly $.06 today.
Crocs Inc (CROX)
The stock is currently trading at $71.91, which is within pennies of a new 52 week high. Options volume is above normal today, with 13,000 contracts on the tape by noon. The majority of this volume is bullish in nature.
At 11:43am ET a multi-market sweep order was used to buy more than 800 October 75 calls at $.20. More than 2600 of these calls have traded so far today, with 91% of the volume taking place on the offer. These offers started the day at $.15 and rose as high as $.55 as the stock lifted and sellers backed away. Buyers at these levels need to see CROX rally another 5% in order to break even.
"
By noon, the largest single stock trade is a spread in QCOM options on the Amex. In this trade, a seller collected $3.34 15,000 times (totaling just over $5 million) to sell the January 08 40-55 call spread. The trade was tied to stock that the executing firm positioned.
With the stock currently trading at $41.21, the seller may be adjusting his existing exposure. This position will perform best if the stock stays away from the 52 week high of $47.72 which was hit in May of this year.
Intel (INTC)
We are continuing to monitor interesting activity in Intel after the earnings beat analyst estimates. The stock is up 4.6% to $26.66 at noon and buyers are active in the October 27.5 calls. Nearly 34,000 contracts have changed hands so far today.
Yesterday we saw net sellers in this contract. The open interest numbers confirmed that much of this volume consisted of new positions. The premium collected on these trades was in the $.13 range. Despite the stock rise, those sellers appear to be covering their shorts for a gain of nearly $.06 today.
Crocs Inc (CROX)
The stock is currently trading at $71.91, which is within pennies of a new 52 week high. Options volume is above normal today, with 13,000 contracts on the tape by noon. The majority of this volume is bullish in nature.
At 11:43am ET a multi-market sweep order was used to buy more than 800 October 75 calls at $.20. More than 2600 of these calls have traded so far today, with 91% of the volume taking place on the offer. These offers started the day at $.15 and rose as high as $.55 as the stock lifted and sellers backed away. Buyers at these levels need to see CROX rally another 5% in order to break even.
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.
View Henry Schwartz's post archive >
