Unusual Options Activity Review: MWW, LNKD, GFI, SYMC, OCR, NOK, PHM, FDO, JBHT, .DJX, FXE

Posted September 6th, 2012 by Joseph Cusick in Unusual Activity

Unusual Options Activity Review For Wednesday, September 5, 2012

Wednesday's Bullish Trading
Monster Worldwide (MWW) saw an impressive amount of options activity Wednesday. The stock was up 45 cents to $7.55 on very heavy volume of 8.9 million shares. By way of comparison, typical volume for MWW is about 1.8 million. Meanwhile, options volume on the New York-based online jobs company was 10.5X the daily average, with about 30,000 calls and 4,900 puts traded on the stock Wednesday. September 8 calls were the most actives. 6,450 contracts changed hands. September 9, September 10, October 8, October 9 and October 11 calls were busy as well. It's not clear what motivated the flurry of activity in MWW, as there weren't any obvious headlines. Another name in the space, LinkedIn (LNKD), was also up on the day ñ gaining 5.5 percent ñ after Jefferies upgraded the stock to Buy from Hold.

Bullish trading was also seen in Gold Fields (GFI), Symantec (SYMC), and Omincare (OCR).

Wednesday's Bearish Trading
Nokia (NOK) came under fire Wednesday after the company launched its new Lumia smartphone, but failed to announce many details related to pricing and availability. The stock lost 45 cents to $2.38 on heavy volume of 218.8 million shares, which is about 4X the average daily volume for Nokia. Meanwhile, 107,000 calls and 71,000 puts traded on the stock. Some investors were possibly liquidating positions in September 2.5 and 3 calls, as both contracts saw a flurry of activity in the morning and more than half of the volume traded on the bid ñ indicating selling. Meanwhile, Weekly 2.5 puts were the most actives in Nokia options. Volume was almost 19,000 contracts, including an afternoon buyer of 14,100 contracts for 16 cents per contract. The Weekly 2.5 put on NOK is now 12 cents in-the-money and has two days of life remaining.

Bearish trading was also seen in Pulte Group (PHM), Family Dollar (FDO), and JB Hunt (JBHT).

Index Recap
The Dow Jones Industrial Index (.DJX) saw increasing options volume Wednesday. The index is designed to equal 1/100th of the Dow Jones Industrial Average and, since the Dow added 11 points to 13,047, DJX edged up .11 to 130.47. Meanwhile 6,600 calls and 545 puts traded on the index. November 135 calls were the most actives. 3,000 traded. Some investors might be taking positions in the contract on the view that the index will climb above 135 through mid-November, which represents a move beyond 13,500 for the Dow Jones Industrial Average. November 134 calls and October 133 puts on the Dow Jones Industrial Index saw some interest today as well.

Analyzing the ETF Market
CurrencyShares Euro Trust (FXE) added 30 cents to $125.16 after the euro ticked modestly higher against the dollar Wednesday. FXE is an exchange-traded fund designed to track 100X the EUR/USD currency pairs. Since the euro is trading at roughly 1.25 against the dollar, FXE is near $125 per share. One player in the options market appears to be anticipating weakness in the euro in the weeks ahead and initiated an October 118 ñ 122 put spread on FXE for 53 cents, 20000X in midday action Wednesday. In this play, the investor apparently bought 20,000 FXE Oct 122 puts for 72 cents and sold 20,000 October 118 puts at 19 cents, which sets up a bearish play heading into a key ECB meeting on interest rates Thursday.

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About Joseph Cusick

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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