Options Flow Summary & Unusual Activity Alert: ING Group (ING) & Yahoo Inc (YHOO)
General Sentiment
US markets are edging higher again today, with broad averages up about 1/3% at midafternoon. There is a bit of a ëpre-fed dayí attitude keeping option volume below normal.
The CBOE Vix is off 1/2 point to 27.54 and put trading lags calls in mixed activity.
ING Group (ING) $32.94 -0.06%
Options on this ADR have traded more than six times the recent average levels today. There was a large $.32.5 buyer of April 45 calls 15,000 times on the NYSE around noon. Currently more than $12 out of the money, the buyer would need a 36% climb in the stock for these calls to pay off. A more likely motivation is a trader with an existing option book adjusting exposure to the stock.
Over the past two weeks weíve seen buying in April 30 and 35 puts. Todayís upside call purchase suggests an off-exchange OTC structure may have traded that requires long listed options as a hedge.
Yahoo Inc (YHOO) $20.21 -2.74%
Often one of the market leaders, YHOO options are trading at a brisk pace ahead of tonightís earnings release. Volume is heavily call-skewed, with 185,000 calls versus 80,000 puts trading.
Focus of the activity is the Feb 22.5 calls, where 30,000 have traded. Buyers dominate the activity, lifting implied vols from 75% to 83%. Sellers hit these calls yesterday, when the stock was $1.20 higher, collecting from $1.09 to $.97 in the first hour of trading. Todayís volume may include those call sellers taking gains of nearly $.50 on their sales.
Posted By: Trade Alert
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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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