Verisign (VRSN) is under pressure on earnings news and options on the Reston, VA application software-developer are busy today. The stock sank $8.59 to $38.02 on heavy turnover of 10.5 million shares, even as the EPS and revenue numbers were in-line with Street estimates. The negative reaction in the stock might be related to Verisign’s announcement that the Commerce Dept might not complete a review of its dot-com registry agreement before it expires at the end of November. For whatever reason, the stock is getting pounded and options volume is more than 60X the daily average. 41,000 calls and 7,310 puts traded in the name. One player apparently seized the weakness to buy a Jan 41 – 45 call spread on VRSN for $1, 5000X. The same spread traded twice, making 10000 on the day, and appears to be opening activity. Jan 40, Dec 41, and Nov 39 calls are the next most actives and 30-day ATM implied volatility is up 27 percent to 37 due to the big swing in the underlying today.
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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.