Mid-day Flow Summary
There was an interesting start to the day as data problems from the Nasdaq stock market delayed options from opening in Nasdaq stocks until 9:40am.
Century Aluminum Co (CENX)
Century options have been unusually active over the past week as the aluminum sector heated up based on Alcoa’s bid for Alcan. The stock lifted from $49.50 to $53.50 on the Alcan news Monday and remains near those highs.
However, recent option flow indicates traders are comfortable selling into the rally, with most activity involving September 55 Calls over the past few days. 3,600 of these calls have traded so far today in the form of aggressive multi-market sweep orders. That adds up to grand total of 7,000 contracts on the week. Open interest confirms that the seller is building a short-call position, which is evidence against a likely takeover.
Amgen Inc (AMGN)
Amgen options are trading a four times their normal daily pace and the stock is down 3% to $55.65. 164,000 contracts have changed hands by noon today. The flow is dominated by consistent selling of the May 55 straddle following yesterday’s FDA news.
More than 250,00 May 55 calls and puts have traded and implied volatility in this strike is near 28% compared to yesterday’s levels of 34%.
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