In GM today, there is heavy action in January upside calls that appears to be opening.? So far traders have scooped the GM January 36 calls about 4500 times.
Calls trade in KBR ? early call buyers looking savvy
Shares of KBR, Inc. (KBR) are up .97 to 19.59.? KBR is near the bottom of the 52 week range.
Paper traded 2393 KBR Jan 20 calls for .40. ?
- The ADV is 616 contracts.
- The OI is 325 contracts.
The volume went up in 1 big block.? Trade in this strike is over 6000 contracts as paper has been bidding up the volume in here.? Posted bids keep getting filled and there is a little battle between the buy writers and long speculators.? IV is up a .5 point in Jan.
- IV 30 is trading for 27.
- HV10 is trading for 24.
- IV 30 is trading over the HV 10.
KBR, Inc. (KBR) is a global engineering, construction and services company supporting the energy, hydrocarbons, Government services, minerals, civil infrastructure, power, industrial and commercial markets. The Company operates in four segments: Hydrocarbons, Infrastructure, Government and Power (IGP), Services, and Other. As of December 31, 2011, the Company conducted its business in over 70 countries.
GM upside call buyers
In GM today, there is heavy action in January upside calls that appears to be opening.? So far traders have scooped the GM January 36 calls about 4500 times for about .15 a contract.? In addition traders have bought north of 11,000 of the January 37 calls paying up to .11.? Some in an extremely large block based on open interest of 39000 and 70000 respectively.? There are Dec 33 call buyers as well.? There is still plenty of room here for GM to rally so the early close makes little sense.
This could be a newsletter service, although the large block trade of the 37 calls makes us think it is not.? It is likely one large trader that stepped in throwing the IV off at the 37 strike followed by traders buying the 36 calls underneath to hedge.? The 36/37 call spread for .04 has an extremely favorable pay out, and done as a premium neutral spread could be an extremely efficient way to go long gm.
Traders looking to piggy back could purchase the GM 36 calls and then lay offers out to sell the 37 calls at .11 a contract.? On a ratio of 1 to 1.5 the resulting trade would be a net premium positive and have upside through recent GM highs.
HES Rolls
HES currently trading 83 dollars.? Today a customer rolled a large short call position.? The trader who had been short the November 85 calls covered the short call position for a .10.? Then against the purchase the trader sold the February 85 calls at 3.50.? This trade was executed 6750 times.
This trade should be viewed as mildly bullish the stock and short HES volatility.? The trader is hoping HES slowly rallies 2 dollars between now and February.? Above 85 his or her stock will be called away and the maximum level he or she would receive for the stock would be 88.50 (not including premium collected from previous call sales.
Traders looking to piggy back this trade could consider selling the December 80 puts at 1.55 as a way to collect premium and potentially enter a long position in this name.