exhbiting interesting flow pointing to positioning for a significant move. At noon OXPS has traded twice it?s typical level of 2500 contracts, and the majority of the flow has involved the 40 strike January calls, currently $8.50 out of the money. 1600 of these calls have traded today for prices from 30 to 40cents and ISEE Sentiment data confirms much of the volume to be opening. December 35 calls were also bought in a multi-market sweep for 10cents when the stock was trading at 31.65 in a low-premium upside play. Put buyers are also active, with 910 Jan-08 27.5 Puts trading and 96% of this flow taking place on the offer. OXPS was also very active yesterday, trading 5x it?s recent volume level, with a buyer of the Jan 32.5-35 call spread on the NYSE paying 90cents several thousand times. A look the prior 5 days of option flow in OXPS reveals consistent buying of calls in January options with strikes from 32.5 to 40 and call open interest growing from 36,000 to 47,000 contracts over the period- suggesting a growing position that may anticipate news ahead of earnings that are expected in January.
About the Author (Author Profile)
Henry Schwartz is the president of Trade Alert LLC, a provider of real-time options analysis tools to leading Wall Street firms. His systems analyze hundreds of thousands of transactions per second to help professionals identify and interpret market activity in real time, supporting informed trading decisions and intelligent idea generation. He has held institutional trading and management roles with Bank of America, Bear Stearns, Salomon Brothers and the Hull Group, and made markets on the CBOE and AMEX floors in the US, and EUREX and MONEP overseas. Prior to founding Trade Alert, he led the electronic market-making group at Bank of America coincident with the launch of the International Securities Exchange. He received his bachelor’s degree in Economics from the University of California, San Diego and his MBA from NYU’s Stern School of Business.