RIM sees heavy pre-earnings trading ahead of its report, due out after the closing bell. 45.5 million shares of the Blackberry-maker, which more than doubles the daily average. Options volume is running 4X the usual, with 120,000 calls and 81,000 puts traded on the stock. Shares are flat at $7 and Weekly 8 calls are the most actives in RIM today. The contract is $1, or 14.3 percent, OTM and expiring one day after the earnings release. The flow seems to include of mix of buying and selling. More than 28,000 traded against 8,545 in open interest. October 8 calls, October 6 puts, Weekly 7 puts, Weekly 6.5 puts, and Weekly 6 puts are the next most actives ahed of the news.A big percentage move should be expected. 30-day ATM implied volatility is up 3.5 percent to 95 and the Weekly 7 straddle trades at 16.5 percent of spot. The stock tanked 19.1 percent when earnings were last reported and has seen average daily post-earnings moves of 14.1 percent during the past four quarters.
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.