Options Flow Summary: SUNW, RAI & HOKU
Sun Microsystems (SUNW)
SUN options traded very actively this morning with more than 50,000 of the July 5 calls on the tape. The bulk of this activity was in a single print of 37,893 at $.16 on the ISE.
The stock is trading near $5.04 and the earnings are expected July 19th (the day before expiry). This trade appears to be a closing sale of calls bought on May 19th for $.58.
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Reynolds American Inc (RAI)
There has been very volatile trading in this stock today. Just after 10:30am, there was a spike from $62 to $63.40. The stock has continued in choppy trading with a high above $65 near 11:40am.
Options traders are active with RAI options trading more than 8 times the recent daily average. The most active contracts include upside calls, with buyers of July 65 calls (5,000 contracts) and sellers of the July 70s.
Hoku Scientific Inc (HOKU)
Solar cell maker HOKU is up more than 12% today to the $12 range. The options flow indicates the traders are closing out gains made on positions entered yesterday. July and August 10 calls were active yesterday with buyer initiated activity near $1.35 and $2.00 respectively.
On todayís move, these calls are being sold at nearly double those levels. The stock was near $5 earlier this month and implied volatility levels are consistently above 100%. This suggests the average daily moves in the 6% to 10% range will keep traders busy this summer.
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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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