Midday Unusual Options Activity Update: NSC, XLF, XLB, XLE, POT, BBBY

Implied Volatility Mover
Norfolk Southern (NSC) is down and implied volatility in the options is up after the railroad lowered guidance due to, among other things, decreased shipments of merchandise and coal. NSC is down $6.34 to $66.35 in very heavy trading of 7.1 million shares. By way of comparison, typical volume on the stock through midday is less than 800,000. Meanwhile, 36,000 options also traded in the name, which is 18X the daily average. 11,000 calls and 25,000 puts so far. September 67.5 puts are the most actives and implied volatility in NSC is up 31.5 percent to 24.

Volume Signals
SPDR Financials (XLF) options volume is running 3X the (22-day) average, with 588,000 contracts traded and call volume accounting for 96 percent of the volume.

SPDR Basic Materials Fund (XLB) options volume is 8X, the average daily, with 166,000 contracts traded and call volume representing for 96 percent of the activity.

SPDR Energy Fund (XLE) options volume is running 2.5X the average daily, with 135,000 contracts traded and call volume accounting for 84 percent of the activity.

Increasing options activity is also being seen in EMC, Potash (POT), and Bed, Bath and Beyond (BBBY).

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