VIX Breaks 5-Session Losing Streak

Updated. IBM (IBM, news, chart, volatility) April calls saw action late Wednesday. The top trades of the day printed about 30 minutes before the closing bell when 6,250 April 95 calls traded for $4.00 per contract and the same number of 110s traded for 70 cents. The traded was repeated more than once until volume jumped to more than 10,000 both contracts. It appears to be bullish spread trading where the investor was buying 95s and selling the same number of 110s. If so, they paid $3.30 (excluding commissions) and have a potential payoff of $11.70 if IBM rallies to $110 or more by April options expiration. It’s somewhat ambitious as IBM closed down $1.44 to $87.79 and about 12 percent from the breakeven, which is at $98.30 at expiration.

KB Homes (KBH, news, chart, volatility) is down $1.17 to $14.12 and some investors in the options market appear to be bracing for further fallout ahead of an earnings report due out Friday before the opening bell. April 12.5 puts are the most actives after two blocks (7000 and 3000) traded at the offer for $2.10 about 90 minutes ago.

Agilent (A, news, chart, volatility) is bucking the bearish trend. A is up 13 cents to $18.26 and options volume is running at three times the normal levels. Feb 25 calls are leading the flow, with 5,000 traded offerside today. Feb 22.5 calls are also active.

Robbins and Myers (RBN, news, chart, volatility) puts are active and implied volatility is elevated heading into earnings due out after the bell. Shares of the machinery company are down 68 cents to $18.49 and options volume is up to 17 times the normal. Feb 20 puts are the most actives. More than 2,000 traded and ISEE Sentiment data reflects opening customer buys. Implied volatility is up to 94, from about 84 the day before.

NetApp (NTAP, news, chart, volatility) is seeing a second day of bearish order flow. Yesterday, Jan 15 puts saw action after RBC lowered the stock to Sector Perform and cut its price target on NTAP. Today, shares are down 63 cents to $14.01 and March 15 puts are active, with 5,757 traded (99 percent offerside). The top trade of the day is a block of 10K Feb 12.5 puts at the offer for 65 cents. It coincided with 5,000 Feb 15 calls on the bid for 95 cents.

Career Education (CECO, news, chart, volatility) spiked about thirty minutes ago amid increasing call volume. Shares are up a nickel to $17.56 and Jan 17.5 calls are the most actives. All of today’s 2,700 has traded on the ask-side of the bid-ask spread. Existing open interest is more than 10K, so it could be closing. Might be worth watching since it coincided with a jump in the stock price at 13:20 ET.

Computer Associates (CA, news, chart, volatility) is down 50 cents to $18.30 and options volume is running at 9 times the average daily levels, with 21,000 puts and only 570 calls traded. The top trade of the day is 9,326 Feb. 12.5 puts at the offer for 25 cents. Looks like an opening buy. Seems like the Feb 17.5 and 15 puts are also being bought to open. No news today. Earnings due out late January/early Feb.

Avon Products (AVP, news, chart, volatility) February puts are seeing high volume after an investor bought 18,000 puts at the $17.5 strike for 35 cents and also bought 9,730 Feb $20 puts for 60 cents. Shares are down 23 cents to $24.72. Earnings due out early Feb.

On Bearish Inventory Report