Stocks finish mixed. VIX closes below 26 for the first time since September 12, 2008. Read More.

Call volume in JetBlue is nearly 7x normal today (chart), with a block of 6000 August 5 calls sold for 20c on the PHLX when shares were near $4.17 this afternoon. Trade opens a new position and may be an overwrite of long stock, based on a view that upside beyond $5 level is likely this summer. Shares started the year near $7.70 and touched a low of 2.81 on March 5.

The activity is similar to trades seen in JBLU on June 9 and discussed in detail, here.

Silver Wheaton (SLW), a Vancouver-based silver miner, is down 2 cents to $8.79, even after silver (July) finished up 8.5 cents to $14.09 Friday (down 11 cents on the week.) In the options market, SLW volume is running 2X the usual. 15,000 calls and 905 puts traded on the session. The top trades of the day: 4000 July – Sept $10 call spreads bought for 55 cents. This so-called “calendar” or “time spread” is possibly a position adjustment (closing July to open September) or possibly a new position.

Either way, it seems to reflect the view a neutral view on the miner (and silver) over the next few weeks, and a bullish view from July to September. That is, SLW might stay below $10 through July expiration (3 weeks) and then move higher from that point forward.

Riverbed Technology (RVBD), a San Francisco-based networking company, is down 92 cents to $22.83 and the July 22.5 – 25 call spread trades 2500X on the CBOE. It was bought for $1 even, according to a contact on the exchange floor. Since existing interest in the 22.5 calls is 1,825, this appears to be a bullish play: 1) either a call spread or a 2) a roll up in strikes. If it is a roll, it’s interesting because we saw just the opposite happen two days ago, when an investor sold the same spread 5000X–which was a roll up in strikes from 22.5 to 25.

Interest in Force Protection (FRPT) continues Friday. Shares are up 32 cents to $9.02 and 1,015 August 10 calls recently traded across multiple exchanges at the offer for $1.20. 2,572 July 10 calls also traded Friday. As noted yesterday (premium story), FRPT is considered a front-runner for a large US military contract, which will be announced today. Options players have been active in FRPT calls in anticipation of good news (chart.) (NAV, GD, OSK also in the running).

Immucor (BLUD) shares are down $2.25 or 13.9% to $13.85 on news that the FDA might revoke the drug maker’s license (Link to story.) Option volume is 10x the daily average with a total of 6,505 puts traded to 2,080 calls (chart.) The notable transaction is a 1×2 calendar spread in which a sold 3,000 of the July $12.50 puts and bought 1,500 of the August $12.50 puts for what looks like an average of 5c debit. The position does well if BLUD drips lower over the next few weeks.

Citrix Systems (CTXS) is unchanged at $32.03 and July 35 and August 40 calls are seeing interest amid unsubstantiated takeover chatter. 6,475 calls traded total, which represents 9.5X (953 percent) the expected. The increased demand for options premium has implied volatilty is up to 47, from about 43.5 the day before.

While the talk is unsubstantiated, it certainly isn’t new. Like VMWare (VMW), CTXS is one of the few independent “virtualization” software companies remaining and, for that reason, is probably on the radar of some larger companies like Microsoft (MSFT) and Oracle (ORCL). The name pops up from time to time as a takeover play (see archives for recent activity). In addition, calls have been active over the past few months, including heavy buying on May 21 (chart), which our scans picked up when the stock was around $28 (premium). In short, takeover speculation in CTXS is not new, but recent options flow indicates that some investors now expect some kind of an announcement in the not-too-distant future.

Occidental Petroleum (OXY) was the subject of bearish put spread trading Friday. Shares are down 73 cents to $64.73, as some of the energy-related names slip on lower crude oil prices. Crude was recently down 35 cents to $69.88 a barrel.


In the options market, at least one strategist expects the weakness in OXY to continue over the next few months. The OXY November 50 – 60 put spread traded 2000X on ISE in early action Friday. In this spread, the strategist bought 2,000 November 60 puts for $5.27 and sold 2,000 November 50 puts for $2.27. Consequently, they paid a net debit of $3 per spread and will breakeven at expiration if OXY falls to $57. The best profits occur if the stock sinks to $50, -22.8 percent, or less by expiration. At that point, the spread has widened to $10, minus the $3 debit, and the profit equals $7 (excluding commissions). Of course, if the stock makes a volatile move lower sooner, the spread can also widen and the strategist can bank a profit by closing out the spread at any time prior to expiration.

A massive put spread was opened on NRG Thursday. Shares finished the day up 1.6 percent to $23.81 and the focus was on the front-month. To be specific, 50,000 July 22.5 puts were bought-to-open for an average of 72.5 cents and 25,000 July 17.5 puts sold-to-open for a nickel. It was tied to 1.3 million shares for $24.10 and, while having a bearish bias, the overall position appears to be a play on volatility. The company is in efforts to stave off a takeover by Exelon (EXC).

Early indications point to modest market weakness on mixed stock news and after the major averages scored big gains the day before. About forty-five minutes before the opening bell on Wall Street, stock index futures indicate that the Dow Jones Industrial Average might give back 20 or 30 of Thursday’s 172 point gain.

Stock index futures showed little reaction to the latest personal/income spending report. Released at 8:30 a.m. eastern time, the data showed spending increased by .3 percent and incomes up 1.4 percent in May. Economists were looking for .3 percent gains in both incomes and spending.

The University of Michigan sentiment index for June is this week’s last economic stat. Due out at 9:55, economists expect a final reading of 69, unchanged from the initial reading reported earlier this month.

Bonds are flat ahead of the news. The benchmark ten-year Treasury, which rallied 1 6/32nd Thursday on news of strong demand at an auction of 7-year notes, is unchanged and yields 3.54 percent.

The dollar is weaker. The buck edged down .44 to 95.38 against the yen. The euro gained .0082 to 1.4086 against the greenback.

Meanwhile, crude oil slipped 15 cents to $70.08 and gold gained $7 to $946.50.

Among the stocks to watch, PALM is up 10.7 percent after reporting a quarterly loss of 40 cents per share, which was not as bad as the 66-cent loss analysts expected. KB Homes (KBH) shares are flat after the homebuilder reported a $1.03 quarterly loss, which was 39 cents worse than estimates. KBH’s revenues fell less than expected. UBS is down after the Swiss Bank warned of a second quarter loss. Boeing (BA) might weigh on the Dow Jones Industrial Average after the aerospace giant lost an order for 15 Dreamliner planes from Qantas Airways. Potash (POT) fell 5 percent after cutting second quarter earnings guidance due to significantly lower sales volumes.