Midday Unusual Options Activity Update: BBY, XHB, PHM, RHT, WLP, SYMC
Implied Volatility Mover
Implied volatility in the options on Best Buy (BBY) fell sharply Wednesday after the electronics retailer reported weaker-than-expected sales numbers and said it will close 50 stores while slashing 400 jobs. BBY shares are under pressure on the news, down $2.24 to $24.38, and options on the stock are actively traded. 43,000 calls and 46,000 puts traded in BBY so far. Some investors might be liquidating positions. The top trade is a 7,500-contract block of Apr 27 calls traded on the 14-cent bid. Meanwhile, levels of implied volatility in the options on the stock eased 30.5 to 30 percent, now that the event risk has passed.
Volume Signals
SPDR Homebuilder ETF (XHB) options volume is running 7.5X the (22-day) average, with 151,000 contracts traded and put volume accounting for 98 percent of the volume.
Pulte Group (PHM) options volume is 14.5X the average daily, with 106,000 contracts traded and put volume representing for 98 percent of the activity.
Best Buy (BBY) options volume is running 5X the average daily, with 89,000 contracts traded and call volume accounting for 52 percent of the activity.
Increasing options activity is also being seen in Red Hat (RHT), Wellpoint (WLP), and Symantec (SYMC).
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Joseph Cusick currently serves as the Senior Vice President of Education and a Senior Market Analyst for optionsXpress. Mr. Cusick seeks out common sense and technologically scalable educational pathways for self-directed investors of all experience levels. He is largely responsible for ramping up delivery of online and offline seminars to customers and potential clients worldwide. Prior to serving in his current role, Mr. Cusick immersed himself in the broker side of optionsXpress by managing his own book of business. Prior to joining optionsXpress, Mr. Cusick served as a market maker and portfolio manager at the Chicago Board of Options Exchange. Joseph is a graduate of Marquette University and holds his Series 4, 7 and 63 registrations with FINRA.
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