Options Flow Summary and Unusual Activity Alert: Pfizer Inc (PFE) & Origin Agritech Ltd (SEED)
General Sentiment
US markets are higher today and option volume is well above normal as many participants return from long holidays and ramp up to full operation for 2008.
The CBOE VIX is down nearly Ω point to 23.39 as prices recover from last week's early selling. Also, call volume leads puts in early afternoon.
Pfizer Inc (PFE)
An impressive multi-market sweep order was used to lift a total of 10,000 otm calls in Pfizer just before noon today. The buyer paid $.35 for 10,000 of the Mar 25 calls while the stock lifted steadily from $23.15 to $23.28.
The majority of the trade was executed via the electronic CBOE Hybrid system, providing complete anonymity to the buyer. While the buyer may be setting up for earnings (expected Jan 24th), open interest of 75,000 contracts suggests the trade may close an open short-call position.
Origin Agritech Ltd SEED
There has been interesting unusual volume in this Chinese agricultural company today. The stock has realized 22 day volatility well above 200% by swinging wildly between $7 and $15.
Currently near $10, todayís options flow suggests the ride may smooth out as an aggressive seller hit the Jan 12.5 calls more than 5,000 times on the NYSE for $.25 in a trade tied to stock. These calls opened at $.60 today with the stock a bit higher. Open interest confirms this trade will create a new position.
This seller appears to be comfortable wearing the largest open interest position in this thinly traded name along with assuming the unlimited upside risk profile of a short-dated short call position.
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.
View Henry Schwartz's post archive >
