Options Flow Summary: TGT, LLTC, UTHR & CSCO
Target Corp (TGT)
Target options are among the most active today with 65,000 contracts traded by 2pm. This is twice its recent daily average volume. The stock is up nearly 5% to $67.13.
A number of multi-market sweep orders have been used to buy July 67.5 calls for prices up to $1.00. That strike leads the day in TGT, with more than 13,000 contracts traded.
Linear Technology Corp LLTC
Options on semiconductor maker LLTC are unusually active today with nearly 7000 contracts changing hands. The average daily volume is usually less than 3000. The stock is near $37.50 and todayís activity is focused in 45 strike calls that expire in February 2008.
Just over 6000 of these calls have traded for $1.00 in seller initiated activity that created new open interest. This suggests a volatility seller is capitalizing on current implied vol levels, or a possible over-writer who is comfortable giving up the gains beyond the next 7.5 points in the stock.
United Therapeutics UTHR
A block was traded in UTHR on the PHLX this afternoon. It was initiated by a buyer of August at-the-money 65 puts for $2.40 in a delta-neutral trade tied to stock. Earnings are expected August 1st and the stock is $10 higher than it was at last earnings. This trade may be a hedge on gains or a trader looking for increasing price volatility over the next few weeks.
Cisco Systems CSCO
A very large block of calls was bought across multiple markets at 2:24pm today. In this trade, more than 17,000 July 27.5 calls were lifted for $1.20. The hedge activity related to this trade could involve more than 1 million shares of the stock, resulting in a significant impact on the stock. The share price at the time of this trade lifted from $28.43 to $28.48 as 450,000 shares quickly hit the tape.
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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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