Unusual Options Activity Review: CLNE, ARO, TRIP, GG, DECK, LSI, DNKN, ANN, .SPX, .VIX, SPY, QQQ
Unusual Options Activity Review For Friday, April 27, 2012
Friday's Bullish Trading
Clean Energy Fuels (CLNE), a Seal Beach, CA maker of alternative fuel natural gas vehicles, jumped $1.15 to $19.36 after Jim Cramer made positive comments about the company on Thursday's installment of Mad Money. The stock moved higher Friday and options activity picked up as well. 9,235 calls and 1,150 puts traded on CLNE Friday, which is 2.5X the daily average. Most of the activity was in smaller sizes. The largest trade was 200 May 18 calls traded for $1.45 per contract. 4,400 CLNE May 18 calls traded on the day. May 19 and 20 calls were the next most actives and levels of implied volatility in CLNE options was up 10 percent to 59, as some players might have been taking positions and hoping for additional good news when the company reports earnings on May 7.
Bullish trading was also seen in Aeropostale (ARO), Trip Advisor (TRIP), and GoldCorp (GG).
Friday's Bearish Trading
Decker Outdoor (DECK) shares tumbled $17.63 to $51.83 after the company's latest earnings report. DECK posted a 20-cent per share profit, which was five cents short of Street estimates. Revenues were in-line with expectations. The stock had heavy volume of almost 15 million shares. Meanwhile, options volume surged to 11X the daily average. 30,000 calls and 27,000 puts traded in the name. May 55 and 60 calls were the most actives, as some investors were probably selling out-of-the-money calls on the view the upside for the stock is limited after Friday's volatile selloff. Downside May and June 50 puts were actively traded as well.
Bearish trading was also seen in LSI Logic (LSI), Dunkin Brands (DNKN), and Ann Taylor (ANN).
Implied volatility in the options market fell last week, but edged a bit higher during the month of April. For example, CBOE Volatility Index (.VIX) hit a morning low of 15.83 before ticking higher late in the day and closing up .08 to 16.32. Still, the market's "fear gauge" has been down three days in a row and has lost 14 percent since Monday. The S&P 500 (.SPX) finished up 3.38 to 1,403.36 and, after a four-day run higher, is back within striking distance of the multi-year highs of 1,419.04 seen on the first trading day of the April. VIX, which tracks the expected volatility priced into S&P 500 options, is now up 5.3 percent month-to-date heading into the last trading day of the month. The volatility index is down 30.3 percent year-to-date, but still (19.5%) above the multi-year lows of 13.66 seen in mid-March.
Analyzing the ETF Market
Volume dried up Friday and the lack of activity was particularly noteworthy in the exchange-traded fund market. A total of 773 million shares traded in the SPDR 500 Trust (SPY), PowerShares QQQ (QQQ) and other exchange traded funds, according to preliminary numbers compiled by Trade Alert. The volume is about a third less than the typical volume for the ETF market. There wasn't much macroeconomic news to guide the action, which might be one reason for the lack of market volatility and low volumes. In addition, with earnings results driving a lot of the activity, market action has turned mixed ñ with stocks posting strong results moving higher and those that miss seeing shares fall. This mixed earnings-related trading might be shifting some of the focus to stock-specific news and away from macroeconomic trends. It looks like it is becoming more of a stock picker's market and there appears to be less interest in ETFs that track the broader market or sectors ñ at least for now.
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