Mid-day Flow Summary: HD & ARRS
Home Depot (HD)
The stock is up more than 6.7% to $40.90 on the unexpected news of a stock repurchase plan. HD options are among the most active in the market today with 138,000 contracts trading. This is more than 5 times their average daily level.
The majority of the order flow involves call sellers who may be taking gains on the rally or selling to capitalize on an expectation of range bound trading for the near future. Nearly 20,000 August 40 calls have traded, with 63% of the order flow taking place on the bid. This volume includes a multi-market seller of 2000 for $2.05 at 10:38am.
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Arris Group (ARRS )
The broadband company Arris is seeing unusual options activity today, with 6600 contracts trading. The recent daily average has been below 1500. The flow is one-sided and focused in short dated options, with more than 4500 July 17.5 calls trading over the course of the day.
The buyers are paying $.35 to $.45 with the stock near $16.75. With the earnings scheduled for July 25th, todayís buyers may be looking for a solid anticipatory rally or other catalyst to propel the stock upward.
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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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