Mid-Day Options Flow Summary: General Sentiment, Apple Inc (AAPL) & Zoran Corp (ZRAN)
General Sentiment
Yesterday's mild recovery continues, helped by Apple's stellar earnings and the subsequent 6% climb in the stock. At mid-day, the broad averages are up slightly and the CBOE VIX is down to 21.04 as fear of future market volatility wanes.
Options volume is on pace for 15 million contracts today. In addition, call volume leads puts by a slight margin in relatively neutral order flow.
Apple Inc (AAPL)
Earnings were announced last night, followed by upward price target revisions by several analysts. Not surprisingly, we have seen a new all time high for the stock, which is currently trading near $185.66.
Apple options volume leads the single stock space with close to 600,000 contracts on the tape by mid-day. That is triple the normal pace for AAPL, a name that often leads the market. Options flow indicates traders are taking some gains at this level, with sellers of January-08 80 strike calls and buyers of downside puts in November.
Zoran Corp (ZRAN)
We first noted this name yesterday when ZRAN options trading spiked ahead of its earnings announcement. The options flow suggested that a significant move (up or down) was likely. ZRAN ended up beating earnings estimates and a slew of analyst upgrades has led the stock up 14% to $23.82 today.
While yesterday's Nov 20 put buyers have seen their $1 premium cut in half, the Nov 22.5 call buyers who paid $.50 have seen those calls quadruple in price. Trading in ZRAN is still above normal today with close to 5,000 contracts on the tape by mid-day. It appears that premium sellers are dominating today's flow.
Posted By: Trade Alert
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We first noted this name yesterday when ZRAN options trading spiked ahead of its earnings announcement. The options flow suggested that a significant move (up or down) was likely. ZRAN ended up beating earnings estimates and a slew of analyst upgrades has led the stock up 14% to $23.82 today.
While yesterday's Nov 20 put buyers have seen their $1 premium cut in half, the Nov 22.5 call buyers who paid $.50 have seen those calls quadruple in price. Trading in ZRAN is still above normal today with close to 5,000 contracts on the tape by mid-day. It appears that premium sellers are dominating today's flow.
Posted By: Trade Alert
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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