Unusual Options Activity Review - CIGX, MHS, CLNE, CCI, TM, TIN, QCOR, .VIX, .SPX, EWJ
Unusual Options Activity Review For Friday, March 11, 2011
Bullish Flow
Star Scientific (CIGX) shares were up 52 cents to $2.89 and options volume was very heavy, after the tobacco company announced that patent claims have been confirmed in a recent legal matter. Shares had been rallying ahead of the news and are now up 55.4 percent since Monday. Prior to the announcement, trading had been heavy in $2 and $2.5 calls in various expiration months. Now, the focus is shifting to the $3 calls, which are 11 cents out-of-the-money. March 3 calls, which expire in one week, are the most actives. 2,455 traded. May 3, Mar 2.5, and Aug 2.5 calls are seeing brisk trading as well.
Bullish trading was also seen in Medco Health Solutions (MHS), Clean Energy Fuels (CLNE), and Crown Castle (CCI).
Bearish Flow
Toyota Motors (TM) shares lost $1.94 to $85.58 after an earthquake of the coast of Sendai, Japan raised concerns about Japanese auto production. Many parts suppliers are located in the region. TM shares are down $1.94 to $85.58 late Friday and have now lost nearly 9 percent since March 1. Trading activity is picking up in Toyota options as well. 5,335 puts and 2,755 calls traded in the automaker so far. March 80 puts, which are 6.5 percent out-of-the-money with 5 trading days of life remaining, are the most actives. 1,275 traded so far.
Bearish flow also surfaced in Temple Inland (TIN) and Questcor Pharmaceuticals (QCOR).
Index Trading
CBOE Volatility Index (.VIX) is down 1.68 to 20.20, as the S&P 500 Index (.SPX) stabilizes after Thursday's 25-point slide. SPX is up 11.4 points heading into the final fifteen minutes of trading Friday. Meanwhile, trading in VIX options is brisk. 260,000 puts and 232,000 calls traded on the volatility index today. The top trade is a block of 20,000 March 20 puts at 25 cents per contract. It might be a closing trade, as VIX March options expire next Wednesday and have just two trading days remaining. Or, it might be a short-term speculative play, betting that VIX will be trading lower next Monday and Tuesday.
ETF Trading
iShares Japan Fund (EWJ) shares lost 1.5 percent to $10.85 Friday aftershares on the Tokyo Stock Exchange moved broadly lower in late-dayaction. The earthquake struck during the final hour of trading in Tokyoand sent the Nikkei sliding 100 points. Yet, the decline has beenorderly and there are no signs of panic. Meanwhile, EWJ options volumeis 29,000 puts and 8,575 calls traded on the ETF. March and April 10 and11 puts are the most actives, as some investors were likely buying someshort-term puts on concerns about additional volatility in Japan'sequity markets. March options expire at the end of next week.
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