Mid-day Flow Summary: ONXX, WMT & General Market Sentiment
Onyx Pharmaceuticals Inc (ONXX)
The stock was up more than $2 (7%) to $33.07. There was positive drug trial news this morning which was accompanied by options trading at 4 times the average daily pace. Most of the activity involves premium sellers who are looking to pound implied volatilities that had been near 100% yesterday.
Todayís action is focused on the June 30 puts, where more than 10,000 have traded so far. The implied volatility has fallen back to the mid 60% range. These puts traded yesterday for $1.85. With todays price and volatility moves, they are now down to $.30.
The stock was up more than $2 (7%) to $33.07. There was positive drug trial news this morning which was accompanied by options trading at 4 times the average daily pace. Most of the activity involves premium sellers who are looking to pound implied volatilities that had been near 100% yesterday.
Todayís action is focused on the June 30 puts, where more than 10,000 have traded so far. The implied volatility has fallen back to the mid 60% range. These puts traded yesterday for $1.85. With todays price and volatility moves, they are now down to $.30.
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Walmart (WMT)
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Walmart (WMT)
Technicians note that WMT has broken through highs from earlier this year. The stock is now trading up $1.43 to $50.90. The activity is concentrated in the calls, with nearly 100,000 on the tape versus 36,000 puts.
The largest trades include aggressive buy orders in the June and July 50 calls using multi-market sweep routing. A total of 35,000 June 50 calls have traded so far, with buyers paying $.95 early this morning up to recent levels above $1.30.
The largest trades include aggressive buy orders in the June and July 50 calls using multi-market sweep routing. A total of 35,000 June 50 calls have traded so far, with buyers paying $.95 early this morning up to recent levels above $1.30.
General Sentiment
Among all the listed options today (index, etf, and equity), approximately 1.4 million puts and 2.7 million calls have traded by noon. This equates to an industry put/call ratio of .52. This is in line with recent levels. The flow is characterized by buyers of calls and puts, with CBOE VIX index up .61 to 13.39.
This increase in market implied volatilities suggests professionals are hedging positions at current levels to protect gains and lessen exposure to ripples from international equity markets.
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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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