IB Options Brief: OmniVision Technologies, Inc. (OVTI) & KKR & Co. LP (KKR)
OVTI ñ OmniVision Technologies, Inc.
Signs of optimism popped up in OmniVision options straight out of the gate this morning, with shares in the maker of CameraChips image sensors rebounding sharply off the weekís lows. Strategists responsible for large prints in OVTI put options appear to be taking profits off the table by unraveling recently initiated bearish spreads, while plain-vanilla call buyers initiate fresh bullish stances on the stock. Shares in OmniVision Technologies rallied as much as 13.2% today to $26.87. Earlier this week, the stock dipped to its lowest since February on the heels of a rapid 35.0% slide in the share price during the past 2 weeks.
It looks like one or more prudent investors that were watching OVTI shares drop purchased a number of sizable put spreads in the September contract last week and at the end of July. In hindsight, those positions were well-timed as the stock continued to give up ground after the bearish spreads had been purchased. Shares in OVTI dropped well beneath the lowest strike price targeted by put players ñ the September $25 strike ñ this week and last, but have since sharply bounced back.
Investors appear to have dismantled a number of the spreads today to take in profits and get out of the way of todayís hefty rebound in the price of the underlying. September contract put options are by far the most active on OmniVision this afternoon, with more than 45,000 puts crossing the tape by 1:45 pm ET.
Meanwhile, bulls are positioning for the recovery in OmniVisionís shares to continue through September expiration. Options players exchanged more than 2,000 now deep in-the-money calls at the September $25 strike against previously existing open interest of 984 contracts. It looks like most of the calls were purchased for a premium of $2.15 apiece early in the trading session.
Call buyers profit if shares in OmniVision Technologies rally another 1.0% to exceed the breakeven price of $27.15 by September expiration. Buyers of the calls at $2.15 this morning are now holding options that cost $3.80 per contract as of 1:35 pm ET. OmniVision is scheduled to report first-quarter earnings after the market closes on August 25.
KKR ñ KKR & Co. LP
The provider of asset management services popped up on our scanners due to heavier-than-usual trading in its call options. KKRís shares are up 7.9% at $11.35 this afternoon, but call activity indicates some traders expect the stock to give up those gains ahead of August expiration next Friday. KKR was cut to ëneutralí from ëbuyí at Goldman Sachs today.
Options players exchanged more than 8,300 in-the-money calls at the August $11 strike against previously existing open interest of just 5 contracts. Nearly all of the calls appear to have been sold outright for a premium of $0.41 per contract. Call sellers walk away with the full amount of premium received as long as the price of the und
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