Options Flow Review & Unusual Activity Alert: MoneyGram International Inc (MGI)
General Sentiment
It was a relatively quiet day of sideways trading for US markets on Tuesday, with little major news to move investors and the broad averages slightly higher at the close.
Over 11 million puts and calls changed hands yesterday. However, that total is only 79% of the recent volume levels. Many traders seem happy to have some time to relax, though, after this monthís credit-fueled volatility.
The CBOE VIX is nearly unchanged at 25.72. In addition, single stock activity was call-dominated with a put/call ratio of 0.77.
MoneyGram International Inc (MGI) 2.33 +30.90%
MGI shares are lifting off their recent lows of nearly $1.60, with earnings expected after the close today. Yesterday’s options trading was at more than four times the normally quiet 860 contracts daily.
The stock has dropped more than 50% from the $13 range in January on a surprising portfolio revaluation and shortage of capital.
Recent option flow suggests some traders are looking for a bounce. Sellers closed their long positions in the 2.5 strike puts last week. These trades took place at IV levels above 100%.
We also saw opening buyers of April 2.5 calls yesterday for prices from $.15 to $.30 as the stock rallied.
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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