IMAX is up 25 cents to $20.02 and options order flow on the stock is bullish for a second time this week. 9,300 calls and 910 puts so far, a ratio of ten-to-one. Jun 21 calls are seeing the bulk of the action. 7,258 traded agianst 4551 in open interest. The flow includes a multi-exchange sweep of 2512 for 30 cents, which appears to be an opening buyer, according to ISEE data. The stock was at $19.55 at the time and 3.1 percent below current levels. Implied volatility is also up and the market on the Jun 21 call on IMAX is now 50 to 60 cents. June 20 and 21 calls were the focus of bullish trading Tuesday (see 6/5 color). The company announced a new 5 theatre deal in Chna today, but the order flow seems to reflect expectations for a more significant news catalyst before next week’s expiration. Short interest might also be hedging their bets with upside calls. Short as percent of float in IMAX is 13.9 percent and the stock is down 18.3 percent during the past month.
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.