WhatsTrading.com Options Recap — 08/20/2012

| August 20, 2012 | 0 Comments More



Stock market averages have traded in a very narrow range again through midday Monday. With no economic data due out until Wednesday and a light earnings calendar, there hasn’t been much news to guide the action one way or the other. European markets finished mostly lower after EU officials dismissed talks about a plan to cap bond yields. Yet, the decline was orderly and there was little excitement across Asia’s equity markets Monday. Consequently, the Dow Jones Industrial Average opened modestly lower, but has traded in a narrow 45-point range. The Dow is off 19 points with less than two hours to trade. The NASDAQ lost 9 points. Share volume is projected to be about 4 billion and well below (67 percent) the normal levels, which is about 6 million.

Overall volume in the options market hasn’t seen the same dramatic drop-off as share volume in August. Some of the decline in stock activity might be related to the Knight Trading debacle and a subsequent decline in high frequency/algo trading, but that’s only speculation. For whatever, share volume is anemic, but options volumes are not so bad. 5 million calls and 4.5 million puts traded across the exchanges, which is about 93 percent the expected volume.

Weekly options on Apple saw a surge of activity this morning as shares launched to new record highs. Volume in the AAPL weeklys expiring 8/24 is approaching a half million contracts today. Best Buy (BBY) options are busy, as the stock falls 7 percent after buyout talks with Richard Shulze hit a roadblock. 49,000 options traded in BBY. Home improvement retailer Lowe’s (LOW) is down 6 percent and seeing higher options volumes on earnings news. 75,000 contracts traded in Lowe’s. A few of the energy-related names – XOP, ECA, and VLO – are seeing heightened activity as well. Puts on the iShares Hong Kong Fund (EWH) have seen action over the past two days ahead of Chinese Flash PMI due Wednesday. CBOE Volatility Index (.VIX) is up .71 to 14.16 after falling to 5-year lows Friday. 165,000 calls and 142,000 puts traded in the VIX pit.

Notable Flow
BKS – Bearish activity detected in Barnes and Noble Inc with 3845 puts trading, or 2x the recent avg daily put volume in the name. Shares near $11.86 (-0.48) with ATMIV lifting by 10.08 point and 50% of todays put premium trading offer side. (Trade-Alert) 10:51

SNV – Bearish activity detected in Synovus Financial Corporation with 6119 puts trading, or 76x the recent avg daily put volume in the name. Shares near $2.01 (0) with ATMIV lifting by 3.05 point and 51% of todays put premium trading offer side. (Trade-Alert) 12:11

EWH – Bearish activity detected in iShares MSCI Hong Kong Index Fund with 5025 puts trading, or 5x the recent avg daily put volume in the name. Shares near $17.2 (0.01) with ATMIV lifting by 1.85 point and 82% of todays put premium trading offer side. (Trade-Alert) 12:51

High options volume is being seen in XOP, LOW, BBY, MRK, VLO, SAN, MDT, ECA, ACAS, XLV

Movers
Symbol Last Change %Change StdDevs
CVH 41.77 +6.83 +19.5% 6.28
RPRX 11.09 +1.56 +16.4% 4.48
ZAGG 7.14 -1.28 -15.2% 2.53
JKS 2.68 +0.26 +10.7% 1.98
BEBE 5.64 -0.63 -10.0% 4.42
QIHU 20.33 +1.79 +9.7% 2.90
OPTT 2.55 +0.19 +8.1% 1.98
HZNP 4.12 -0.36 -8.0% 1.24
BBY 18.75 -1.52 -7.5% 2.04 Pre-Earnings
VELT 7.71 +0.53 +7.4% 1.38

Shakers (Implied volatility Movers)
Symbol IV[30d] IVChg IVChg% SkewAdjChg Last Change
CVH 13.5% -12.3 -47.7% -21.0 $41.77 +6.83
ACOM 54.2% +13.0 +31.6% +6.2 $30.46 -2.06
SUN 11.1% +2.7 +31.6% +2.8 $47.08 -0.33
MDT 23.6% +5.3 +28.7% +4.3 $41.19 +0.35 Pre-Earnings
AMTD 23.1% +5.1 +27.9% +3.6 $16.80 -0.04
AWAY 33.9% +7.4 +27.8% +3.0 $24.50 -0.49
WM 15.0% +3.1 +26.0% +0.4 $34.48 -1.19
OZM 30.2% +6.1 +25.5% N/A $8.15 -0.15
AVGO 33.8% +6.8 +25.0% +4.4 $35.62 -1.22
ZAGG 58.3% +11.5 +24.6% +10.8 $7.14 -1.28

52-Week Highs
114 new highs: .AVSPY .OEX .XEO AAPL AAT ADP ADS AFFY AGU AHS AIRM ALJ ANN ARI ASPS AVD AZPN BBCN BECN BIP BRLI CF CHH CHS CINF CLGX CNI CNQR CP CSJ CSM CTGX CVBF CVH CYNO DDD DSW EQIX EQM EXR FAF FLT FRAN FSIN FSS GGC GIL GOOG HGR HTH ISBC KALU KNXA KORS KVHI LKQ LMT LNDC LPS LSE LYB MAT MDAS MDT MENT MSG MX NCT NNN NOC OCN OEF OILT ONB PAA PDCO PM PSX PVTB RF RMD ROST RPRX RPT RWT SAFT SEIC SHEN SIRI SJM SPNC SRDX SRZ SSP SSYS STAN STI STWD SXC TCAP TCBI TDG TJX TRP TRV TSO TWX UNFI VLO VOX WAC WMC WOR XLK

52-week Lows
25 new lows: ANGI AONE ASTM ATPG BALT BV CACH CAST CERP CWH FB GRPN ITMN JST KID LPHI LPR NXTM PNSN PSQ QID SQQQ SUTR TAOM WHX

Top Equity Blocks
3.00m VXX 11.22 +0.06 +0.5% 13:49:35 – Average Price Trade
1.50m DLPH 29.35 -0.15 -0.5% 12:01:54 – Burst
1.37m ACAS 11.17 +0.02 +0.2% 13:45:23 – Tied to Options
1.20m CSCO 18.85 -0.21 -1.1% 10:57:09
1.20m VWO 41.02 -0.33 -0.8% 10:37:20
1.00m QQQ 68.32 +0.01 +0.0% 12:09:43
1.00m NWSA 23.15 -0.11 -0.5% 11:01:45
1.00m IWM 81.12 -0.68 -0.8% 10:25:54 – Average Price Trade
900k QQQ 68.11 -0.25 -0.4% 10:15:48
800k SPY 141.89 -0.22 -0.2% 11:51:51 – Derivatively Priced

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Category: Market Update

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About the Author (Author Profile)

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.

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