Thursday’s Bullish Trading
Herbalife (HLF) is seeing heavy trading Thursday. The stock saw an afternoon spike and is up $1.36 to $38.56 on volume of 9.4 million shares after the SEC filed a complaint against a former KPMG employee for allegedly leaking non-public information to a friend. The leaked info apparently included a tip related to HLF and speculation that the company was looking to go private. Shares of the multi-level marketing company saw an afternoon spike as the report made the rounds Thursday. Meanwhile, options volume on HLF is running 4X the daily average. 96,000 calls and 14,000 puts so far. April 40 calls are the most active. Weekly 40, May 42.5 and April 40.5 calls on the stock are busy as well.
Bullish trading was also seen in Xerox (XRX), Noble Energy (NE), and Verisign (VRSN).
Thursday’s Bearish Trading
Blackberry (BBRY) fell Thursday and is down $1.15 to $13.45 in heavy trading of 63 million shares. The stock came under pressure early in the day on cautious analyst commentary related to the company’s efforts to turn around sales in a highly competitive smartphone market. The stock is down and options volume is running almost 2X the daily average. 135,000 calls and 179,000 puts traded in BBRY so far. Weekly 13.5 puts, which are now 5 cents in-the-money and expiring after tomorrow, are the most active in BBRY. 23,000 traded. Weekly 14 and 14.5 puts are seeing higher volumes as well, as are the April 13.5, 14, and 15 put options ? which expire at the end of next week.
Bearish trading was also seen in Cemex (CX), Texas Instruments (TXN), and NII Holdings (NIHD).
Index Recap
The NASDAQ 100 Index (.NDX) is seeing more interest than usual. The index, which tracks the price action of the top 100 non-financial stocks that trade on the NASDAQ Stock Market, is down 2.10 to 2,857.10 after many of the large cap tech names that dominate the index slipped on concerns about a slowdown in global PC shipments. On the options front, 17,000 calls and 34,000 puts traded on the NASDAQ 100 Index today. April 2,475 and 2,500 puts are the most actives, as one investor was apparently selling the spread to close a position ahead of next week’s expiration. May 2,525 and 2,550 puts are the next most actives in NDX and are seeing opening activity, as it looks like the same investor was opening a new position in the May 2525 ? 2550 put spread. At the end of the day, the activity is probably rolling. An investor had a position in the April 2475 ? 2500 spread and is now adjusting up in strikes and out one month before the expiration next week. An investor with a large portfolio of NASDAQ names might have initiated the position as part of a hedging strategy.
Analyzing the ETF Market
iShares Japan Fund (EWJ) is moving up 15 cents to $11.36 and its best levels since mid-2008. Shares have rallied 9.3 percent since the Bank of Japan announced plans for unprecedented monetary stimulus to help the Japanese economy. The announcement was made a little more than a week ago and EWJ has been moving sharply higher since that time. The trend continues today and trading in the options on the ETF is brisk. 125,000 calls and 7,750 puts so far. June and January 12 calls are the most actives in the Japan ETF, as some investors are possibly taking positions in upside call on EWJ on the view the recent rally in Tokyo will continue in the months ahead.
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