Some less actively traded names seeing bullish order flow: Wonder Auto Tech (WATG), Cheesecake Factory (CAKE), China Surveillance (CSR) Bearish order flow: Healthnet (HNT), Air Corp. (AAR), iShares Germany (EWG). Post Earnings: Aetna (AET) Pre-Earnings: CVS Ex-Div: American Electric Power (AEP), Exxon Mobile (XOM), Olin (OLN)

*Scanning all single-stocks subject to 2500 contracts minimum call or put volume

Airgas call volume and total open interest spiked this week to multi-year highs, directly ahead of the deal that caused shares to gap nearly 40% higher to the $60 level this morning, suggesting traders may have reason to accumulate upside exposure before today’s announcement. Call volume over the preceding four days exceded 8200 ccontracts, the busiest period in two years, including more than 2000 of the April 55 calls, most of which were bought yesterday for 10cents to open a new position when shares were below $44.00. Total call open interest grew from 3600 to 8600 contracts over the week. In contrast to the customer account type used to frontrun the Perot deal last year, yesterday’s clearing data shows most of the buying was categorized as Firm account for clearing purposes.


ARG Options Action Ahead of Announcement (click for larger)

*Scanning all single-stocks subject to 2500 contracts minimum call or put volume

SmithFields (SFD) is up 21 cents to $15.17 on the heels of Tyson’s strong results — see 9:53 color. In the options market, one player bought to open 5060 July 17.5 calls at 90 cents on ISE, according to ISEE data. More than 7,000 now traded vs. 462 in open interest. SFD is due to report around Mar 11.

Williams shares are off 40c to $20.08 notable trade is the May/Aug $20 call spread which traded 14,100x done for a 55c net debit. This would appear to be roll, sold to close May bought to open Aug. to extend the time frame. The May position was initiated just this past Tues. 2/2 when the stock was trading around $21.80 a share.

Tyson (TSN) touched a new 52-week high and is up 92 cents to $14.91 after the food company reported a quarterly profit of 42 cents per share, which trounced analyst estimates of 18 cents. There was an interesting flurry of call buying seen in TSN late yesterday ahead of the news. It started about 25 minutes before the closing bell and included lots of Apr 15 calls at the asking price of 55 and 60 cents per contract. 7146 traded total (84 percent Ask) and 6147 contracts of new interest was created to a total of 15.3K — making the April 15 call the largest open interest position in the name.


Late day call volume spike in TSN (click to enlarge)

Stocks are indicated modestly higher after the Labor Department’s latest payroll report showed an unexpected decline in the unemployment rate Friday morning. Thirty minutes before the opening bell on Wall Street, stock index futures hint at a modest early gain for the Dow Jones Industrial Average.

The Labor Department reports that the US economy lost 20,000 jobs in January, which was worse than the 14,000 increase in jobs economists had predicted. Making matters worse, December numbers were revised down to show a loss of 150,000, down from the -85,000 first reported.

However, after a 269-point plunge in the Dow Thursday, a bad report had been discounted and the data contained a few bright spots. The unemployment rate unexpectedly fell to 9.7 percent from 10 percent. Economists had expected the rate of unemployed to stay steady. Average hourly earnings rose .3 percent, and better than expectations of +.2 percent.

Stock index futures edged higher on the data and bonds gave back some of the big gains seen the day before. The benchmark ten-year Treasury is down 5/32nd and now yields 3.63 percent.

The dollar added .61 to 89.61 against the Japanese yen. Euro woes continue. The euro-zone currency is down another .0007 to 1.3719 against the buck.

Crude oil added .40 to $73.44 a barrel. Gold is steady at $1063 an ounce.

Among the stocks to watch, Mastercard (MA) might bounce back from post-earnings losses suffered yesterday after Wells Fargo upgraded the stock to Outperform from Market Perform. Beazer Homes (BZH) gained 2.7 percent on earnings news. Tyson (TSN) is also up on earnings. However, Leap Wireless (LEAP) fell 5 percent after JP Morgan downgraded the stock to Underweight. Aetna (AET) and Sunoco (SUN) are trading lower on earnings.


Source: Bloomberg.com