Midday Unusual Options Activity Update: FTR, BIDU, GILD, XHB, DVN, VVUS, ALL
Implied Volatility Mover
Levels of implied volatility in Frontier Communications (FTR) are coming down sharply after the Stamford, CT telecom reported earnings after the closing bell Thursday. The results were slightly better than expected and the company also announced plans to cut its dividend. Shares have added 16 cents to $4.63 and are on a three-day 14 percent winning run higher. Still, the stock had been battered throughout most of 2011 and is down about 50 percent from the levels seen in a year ago. Today's option trading in FTR is brisk, with 53,000 calls and 2,810 puts traded on the stock so far. March 4 calls, which had seen substantial volume heading into the report, are the most actives. 30,000 traded, as some investors may have been liquidating positions on the earnings news. Levels of implied volatility are falling sharply, down 40 percent to 49.
Volume Signals
Baidu.com (BIDU) options volume is running 2X the (22-day) average, with 174,000 contracts traded and call activity accounting for 63 percent of the volume.
Gilead Sciences (GILD) options volume is 6X the daily average, with 107,000 contracts traded and call volume representing 51 percent of the activity.
SPDR Homebuilders Trust (XHB) options volume is running 3X the average daily, with 75,000 contracts traded and put volume representing 97 percent of the total volume.
Increasing options activity is also being seen in Devon Energy (DVN), Vivus Pharmaceuticals (VVUS), and Allstate (ALL).
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