Heavy trading in Hertz (HTZ) calls, as shares get whacked on news Dollar Thrifty (DTG) shareholders rejected Hertz’s most recent takeover offer. Hertz has said in recent days that it will walk away from merger talks if DTG shareholders voted against the deal. The knee-jerk reaction in HTZ was a drop to $10.27 per share in active trading. The stock is down 86 cents to $10.75 and recent trades include a block of 19,500 Oct 12 calls on the 10 cent bid. A block of 10K traded this morning, at 21 cents, before the news. Looks like liquidating trades. 42.3K have traded total and open interest is 40K, currently the largest position in the name. Oct 10, Oct 11, Nov 12, Jan 10, and Dec 11 calls are seeing action as well, mostly on the bid. Implied volatility is down 9 percent to 61 amid diminishing uncertainty about the deal.

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

Monsanto (MON), which had suffered a three-day 31.4 percent slide prior to today, is down another 46 cents to $47.54. Shares faced a bit off selling pressure about 40 minutes ago, falling to $47.17, on a Global Research story that a new scientific study confirmed that Roundup is toxic, a danger to animal organisms and a danger to humans. So, the slide in MON shares continues. However, at least one player seems to be looking for a rebound as a Nov 55 – 60 call spread was apparently initiated this morning for a debit of 54 cents, 4400X. The same spread traded at 58 cents 5000X late yesterday.

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

Sprint Nextel (S) calls are busy for a second day. Shares are flat at $4.59 and the focus is on the Oct 5 call options. 22,000 traded through midday. 95 percent traded at the ask and open interest of 11.6K. The top trade is a block of 5000 at the 6-cent ask price, which might be a non-customer or firm buyer. Sprint Nextel calls were busy yesterday as well (see 9/29 color) and the action resulted in 22K contracts of new open interest. Jan 5 calls saw the most new open interest, increasing by 9,779 to 204,483 and currently the largest position in the name (followed by the Jan 6 call with 117,986 in open interest).

iPath S&P 500 VIX Short Term Futures (VXX) adds 28 cents to $16.88 and a noteworthy trade Wednesday is a block of 35,000 December 19 calls bought at $1.35 per contract. Looks like an opening position and perhaps a volatility play ahead of key economic data over the next two days (GDP, jobless claims, PMI Thursday then personal income/spending, UofMich Sentiment, construction spending, ISM, and auto/truck sales Friday.)

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