Midday Unusual Options Activity Update: AEO, DNDN, EWT, LLY, TGT, MON, MU

Posted January 5th, 2012 by Joseph Cusick in Unusual Activity

Implied Volatility Mover And Volume Signals For Midday 1/5/2012

Implied Volatility Mover
American Eagle Outfitters (AEO) implied volatility is moving lower after the retailer issued a fourth quarter earnings warning. Shares are down $1.66 to $13.50 and implied volatility in the options on the stock is down 9.5 percent to 34. Some players are selling puts on the news. In morning trading, with the stock near $13 per share, one strategist sold 3,500 January $13 puts on AEO at 40 cents per contract. The timing was good. Shares are up 50 cents since that time. More than 12,000 contracts have now traded and the market for the Jan $13 put on AEO is 15 to 20 cents.

Volume Signals
Dendreon (DNDN) options volume is running 14X the (22-day) average, with 82,000 contracts traded and call activity accounting for 68 percent of the volume.

iShares Taiwan Fund (EWT) options volume is 9.5X the average daily, with 58,000 contracts traded and call volume representing 99 percent of the activity.

Eli Lilly (LLY) options volume is running 3X the average daily, with 52,000 contracts traded and call volume representing 61 percent of the total volume.

Increasing options activity is also being seen in Target (TGT), Monsanto (MON), and Micron Technology (MU).

--------------------------------------------------------------------------------

Disclaimers
This article is provided for informational purposes only. No statementin this article should be construed as a recommendation to buy or sell asecurity or to provide investment advice. The content provided has beenobtained from sources deemed reliable but is not guaranteed as toaccuracy and completeness. optionsXpress makes every effort to providetimely information to its recipients but cannot guarantee specificdelivery times due to factors beyond our control.

Derivatives involve substantial risk and are not appropriate for all investors. Please read the "Disclosure Statement for Futures and Options" prior to investing in futures or options.

"

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.

View Joseph Cusick's post archive >