Mid-day Flow Summary: General Sentiment, Apple Inc (AAPL) & Biovail Corp (BVF)
General Sentiment
It has been a mixed day for US markets, with most broad indexes returning early gains and remaining essentially unchanged. The CBOE VIX sentiment indicator is trading near 17.05. As we approach noon, total options volume is just under 5 million contracts. Calls are leading puts nearly 3:2 for a generally bullish picture.
Apple Inc (AAPL)
While usually among the most active names, with typical volume over 250,000 contracts per day, AAPL is exceptionally busy today with 350,000 contracts on the tape by noon. The stock is also at new highs, hitting $168.31 earlier today.
Traders are primarily focusing on the October 170 calls. Nearly 37,000 contracts have changed hands with buyers leading the flow. Buyers are also picking up October 175 calls for prices near $2.70. The lack of large institutional orders suggests that the majority of this flow is retail speculation. Some market participants may view this activity as a precursor to a short-term top.
Biovail Corp (BVF)
We are seeing a great deal of activity in this biotech name today. The stock is down slightly to $18.16 and just over 7,000 contracts have changed hands. This amounts to four times the recent daily activity levels. Most of the activity is centered around the October and November 17.5 calls. Close to 3,000 of each contract have traded today in a roll of long calls from October to November.
The roll buyer started out paying $.475 on the Amex more than 2,000 times. He also "legged" the spread for up to $.50 using electronic sweep orders to tap liquidity across multiple exchanges.
Posted By: Trade Alert
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About Henry Schwartz
Henry Schwartz has traded derivatives on US and European exchanges for nearly 20 years. His experience includes market-making and institutional trading at the Hull Group, Salomon Brothers, Bear Stearns and most recently Banc of America Securities, where he led the electronic market-making project coincident with the launch of the ISE. His current work involves real-time stream analysis of options market activity for a number of leading institutional sell-side firms.
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