Options Flow Summary: General Sentiment & Mirant Corp (MIR)
General Sentiment
Today is expiration Friday, and investors appear to be looking past Googleís strong results and focusing on more negative issues in the market. Late this afternoon, broad averages are down 1.8%.
The Dow Industrials are currently at lows of the day, down 280 points to 13,609. The CBOE VIX is above 21 on this selloff as traders implement defensive measures. Option volume is on-pace for a strong 17 million contracts on this large move and expiration related position adjustments.
Mirant Corp (MIR)
Flow in this stock was noted yesterday as a large put buyer entered the market buying January-08 40 puts. Today we are seeing additional flow in this option including a massive buy of 114,000 contracts on the Amex tied to 3.6 million shares of stock. Total premium involved is more than $23 million. The potential exercise consequences of 11 million shares for this name are significant as the stock normally trades only 3 million shares per day.
Motivation is likely one of the largest institutional holders in the name locking in gains as the stock is up from the low $30 range earlier this year (and down from highs near $48). Stock is currently trading down 2.6% to $41.94.
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Flow in this stock was noted yesterday as a large put buyer entered the market buying January-08 40 puts. Today we are seeing additional flow in this option including a massive buy of 114,000 contracts on the Amex tied to 3.6 million shares of stock. Total premium involved is more than $23 million. The potential exercise consequences of 11 million shares for this name are significant as the stock normally trades only 3 million shares per day.
Motivation is likely one of the largest institutional holders in the name locking in gains as the stock is up from the low $30 range earlier this year (and down from highs near $48). Stock is currently trading down 2.6% to $41.94.
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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