Midday Unusual Options Activity Update: AUXL, JPM, ARNA, MDR, WFR, DDS, TER

Posted May 11th, 2012 by Joseph Cusick in Unusual Activity

Implied Volatility Mover
Auxillium Pharmaceuticals (AUXL), a Malvern, PA biotechnology company, is up 23 cents to $18.41 and some players in the options market seem to be anticipating additional upside in the stock. 5,500 calls and 490 puts traded in AUXL so far. Interestingly, implied volatility in June options is up 7.5 percent to 72 on the day. IV typically falls after a company reports earnings. However, AUXL also said today that phase III trial results for its XIAFLEX drug are expected by the end of the second quarter. The higher implied volatility is perhaps an indication that players in the options market are now looking beyond the earnings news and to the upcoming trial results.

Volume Signals
JP Morgan (JPM) options volume is running 5X the (22-day) average, with 419,000 contracts traded and put volume accounting for 58 percent of the volume.

Arena Pharmaceuticals (ARNA) options volume is 3X the average daily, with 146,000 contracts traded and call volume representing for 60 percent of the activity.

McDermott (MDR) options volume is running 8.5X the average daily, with 16,000 contracts traded and put volume accounting for 77 percent of the activity.

Increasing options activity is also being seen in MEMC (WFR), Dillard's (DDS), and Teradyne (TER).

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About Joseph Cusick

Joseph Cusick currently serves as the Senior Vice President of Education and a Senior Market Analyst for optionsXpress. Mr. Cusick seeks out common sense and technologically scalable educational pathways for self-directed investors of all experience levels. He is largely responsible for ramping up delivery of online and offline seminars to customers and potential clients worldwide. Prior to serving in his current role, Mr. Cusick immersed himself in the broker side of optionsXpress by managing his own book of business. Prior to joining optionsXpress, Mr. Cusick served as a market maker and portfolio manager at the Chicago Board of Options Exchange. Joseph is a graduate of Marquette University and holds his Series 4, 7 and 63 registrations with FINRA.

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