Intra-Day Significant Options Activity
In the KBW Mortgage Index (MFX, 92.56, -1.6%) there is more bearish trading after seeing March 97.5 put buyers late last week. Soon after the opening bell this morning, investors bought 500 more of the March 97.5 puts and in another trade participants sold 1,000 March 90 puts to buy 400 April 92.5 puts.
Short-dated option activity in the Financial SPDR (XLF, 35.69, -0.5%) continues to suggest investors possess a cautious sentiment, while volatility is for sale longer-term. This morning, participants bought approximately 15,000 March 34 (.22d) puts and 20,000 March 35 (.27d) puts. Towards the end of last Friday's session, investors bought nearly 15,000 April 35 puts after buying 150,000 on Thursday (rolling from March). In other trading today, participants sold 35,000 September 34 (.30d) puts at $0.30.
In the Consumer Discretionary SPDR (XLY, 38.16, -0.3%) March and April put buyers retuned to the market today to buy 1,000 March 38 puts for $0.275 and 2,000 April 38 puts for $0.675. It was just this past Thursday that investors bought puts in each month as a package for $1.05.
Over the last week in Genzyme Corp (GENZ, 60.12, -0.05%) order flow in the options has had a bullish appearance as investors have been both buyers of calls and sellers puts. For instance, today investors have sold 2,500 April 57.5 (.30d) puts after selling 3,000 on Friday. Additionally, we have also seen buyers of upside calls in both March and April, with the April 65 calls being the most active.
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FINANCIAL - MORTGAGE LENDER
In Indymac Bancorp (NDE, 28.98, -5.4%) the aggressive put buying continues while related stock New Century (NEW) is halted. Puts are trading in multiple months and strikes although the April 25 puts and July 30 puts are the most active with 6,000 and 2,000 options on the tape, respectively.
FINANCIAL - REGIONAL BANK
In National City Corp (NCC, 36.93, -0.4%) March calls are bid today suggesting investors could be wagering on an upside move before the end of this week. Specifically, investors have bought 5,500 March 37.5 (.33d) calls paying up to $0.30.
In Lennar Co (LEN, 46.19, -4.3%) this afternoon, investors bought 7,500 April 45 (.37d) puts with the stock trading roughly $46.40. The trade implies the investors are expecting increased movement in the stock in the next month and want protection in the event there is a downside move. LEN is hosting a shareholder meeting on 3/28/07 at which time they may also release earnings.
In Panera Bread Co. (PNRA, 60.21, +0.4%) opening investors bought approximately 2,000 May 60 (.57d) calls paying from $3.60 up to $3.90, and separately sold May 60 puts in smaller size. Overall, the trading indicates a bullish bias as investors are positioning for upside heading into May expiration (5/19/07). PNRA is estimated to report earnings on 4/25/07.
In Mobile Telesystems OJSC (MBT, 51.11, +0.5%) opening investors bought 1,000 April 55 (.35d) calls this morning. While the out of-the-money call buying is not necessarily bullish, the volatility buyers are gaining leverage to increased movement in MBT. MBT expects to report results at the end of March. MBT, along with VIP and MegaFon, are among the 11 companies that have applied for 3G wireless licenses in Russia. Results will be announced on April 20, according to Dow Jones.
For at least the third trading day in a row in Motorola (MOT, 18.75, +1.5%) options, there is bearish trading. This afternoon, investors paid up to $0.45 for 10,000 March 19 puts. Friday is the last day to trade the puts, so the investors will win to the position if the stock trades below $18.55 by the end of the week. Trading in previous sessions has consisted of April 17.5 and 20 call sellers and buyers of April 17.5 and 20 puts and July 20 puts.
MOT continues to underperform related stocks such as Nokia (NOK) and Qualcomm (QCOM). In the past six months, MOT is down nearly 25% while NOK and QCOM are both up approximately 10.5%. At recent industry conferences, MOT reiterated that it expects 1H07 to be challenging, before improving in 2H07. During a February 21 presentation, MOT’s CFO indicated that 1Q margins would likely remain at depressed levels. Analysts also point out the demand for MOT’s newer models, such as the KRZR and RIZR, appears sluggish. MOT is estimated to report 1Q earnings mid-April.
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