Options Flow Summary: General Sentiment, OVTI & DELL
General Sentiment
We have seen a strong up move today on the news that the FHA will step in with a program to aid some borrowers. The broad averages are nearly 1% higher, and the option volume is very light. The CBOE VIX is down nearly 2 points to 23.06, and the overall market call volume leads puts by a slight margin.
OmniVision Technologies Inc (OVTI)
A positive pre-announcement from OVTI has the stock up more than 5% to $20.99. Also, options activity has been strong all week.
Todayís flow is concentrated in the September 22.5 calls, with more than 13,000 trading in a buyer dominated flow. Paying for out-of-the money calls before a long weekend is unusual. This may be related to the significant short-interest in the stock as well.
Dell Inc (Dell)
Following up the flow in Dell that was noted yesterday, the stock opened higher but quickly reversed. It is now down $.69 to $27.78.
Some of yesterdayís persistent call sellers are taking gains today, covering the Sept. 27.5 sold yesterday for $1.40 at current prices of $1.00. Additional flow in Dell today involves more selling of upside strikes, with 30 Strike calls in September and October seeing the most action.
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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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