Unusual Options Activity Review: GRPN, WYNN, LNG, RBCN, ORCL, CLWR, WM, LEN, NFX and TIBX
This Morning's Bullish Trading
Groupon (GRPN) is bucking the bearish trend Friday. The stock is up 5.5 percent to $7.96 in active trading of 8.7 million shares, but no immediate headlines to explain the strength. Options on the online daily deals company are busy as well. 63,000 calls and 12,000 puts traded on Groupon so far, which is 2.5X the daily average. Jan 10 calls, which are more than $2, or 25 percent, out-of-the-money, are the most active. 33,375 contracts have changed hands. Jul 7, Jan 8 and Jun 8 calls on GRPN are seeing active trading as well.
Wynn Resorts (WYNN) loses $4.37 to $127.80 in active trading of 1.6 million shares and options volume on the stock is running more than double the daily average. 7,610 calls and 6,260 puts so far. The top trades are part of a spread, in which the investor apparently bought 1,140 Jul 125 calls on WYNN for $6.41 and sold 1,140 Jul 135 calls at $1.86. Looking at the open interest, the spread, for $4.55, might be a roll down in strikes. That is, the investor was long the Jul 135 calls and is now adjusting the position down to the Jul 125 calls after a 3-day 8.2 percent drop in the stock.
This Morning's Bearish Trading
Cheniere Energy (LNG) drops 87 cents to $25.57 and it looks like a Sep 20 - 31 bearish risk-reversal is being opened on the stock at 10 cents, 7000X. LNG Sep 20 puts traded for 48 cents when the market was 44 to 48 cents and Sep 31 calls at 58 cents when the market was 57 to 60 cents. The stock is down 16.7 percent in the past month and an investor might be opening the bearish combo as a "collar" strategy against stock to help hedge the risk of further losses through mid-September.
Rubicon Technology (RBCN), a Bensenville, IL semiconductor equipment-maker, adds 42 cents to $7.51 and a Jun – Jul 8 put spread is bought on the stock for 40 cents, 3000X. In this trade, the investor is apparently selling-to-close a position in Jun 8 puts, which are 49 cents in-the-money and expiring after today. They're closing the puts to avoid auto-exercise on the contract, which would result in selling 100 shares of stock for every put. At the same time, they are opening a new block of puts at the July 8 strike. A shareholder with a position in RBCN might be rolling the puts to adjust a hedge or protective put strategy.
Oracle (ORCL) options volume is running 9.5X the (22-day) average, with 148,000 contracts traded and put volume accounting for 56 percent of the volume.
Groupon (GRPN) options volume is 2X, the average daily, with 67,000 contracts traded and call option volume representing 85 percent of the activity.
Clearwire (CLWR) options volume is running 2.5X the average daily, with 62,000 contracts traded and call volume accounting for 85 percent of the activity.
Increasing options activity is also being seen in Waste Management (WM), Lennar (LEN), and Newfield Exploration (NFX).
Implied Volatility Mover
Implied volatility in the options on Tibco Software (TIBX) is easing after the stock traded up 20 cents to $21.20 in active trading of 3.6 million shares in the wake of the company's earnings report. The software-developer reported in-line EPS and revenue numbers after the closing bell yesterday and the stock has seen a modest reaction to the news. Meanwhile, 2,970 calls and 3,800 puts traded on the stock. Jun 21 puts and calls, which expire after today, are the most actives and 30-day implied volatility in TIBX is falling 26 percent to 38.5.
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