Option Flow Summary and Unusual Activity Alert: Nortel Networks Corp (NT) & Intersil Corporation (ISIL)
General Sentiment
US markets are holding steady today. This is impressive considering poor CSCO earnings and selloffs among a number of international markets.
Option volume is above normal and on pace for nearly 17 million contracts with puts slightly ahead of calls. The CBOE VIX index is down 1/3 point to 28.61, suggesting that traders are adjusting to the recent circumstances without escalating concern about increasing future volatility.
Nortel Networks Corp (NT) $11.19 -3.12%
There has been unusual upside activity taking place in NT options today. We are seeing consistent customer buying of nearly 8,000 Jun 12.5 calls for prices near $1.25 throughout the morning.
Feb 12.5 calls were active yesterday, bought for $.20 when the stock was higher. In the face of a 10% decline in the stock this week, this flow looks like short-sellers hedging their upside exposure.
Intersil Corporation (ISIL) $22.43 +2.05%
Chip maker ISIL is trading triple its normal options volume today, with more than 4,800 calls trading, versus just 380 puts.
Call activity is focused on the Feb 22.5 Strike, where an opening customer buyer paid $.40 for 2,000 contracts on the ISE just before 11am.
The company is hosting an ëanalyst dayí today, with a conference call and other activities that may be contributing to the bounce and upside interest.
Posted By: Trade Alert
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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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