Thursday’s Bullish Trading
DISH Networks (DISH) has seen a flurry of activity Thursday. The stock was up $1.13 to $35.25 and to new 52-week highs in active trading of 4.7 million shares. By way of comparison, average daily volume was about 2.3 million. Meanwhile, options volume was running 7.5X the daily average after about 33,000 calls and 2,550 puts traded on DISH Thursday. November 35 calls, which are now 25 cents in-the-money and expiring in 29 days, were the most actives on the stock. 9,850 traded against 7,829 in open interest. October 35, October 36, and January 34 calls were the next most actives in DISH. No headlines to explain the heightened activity in the stock Thursday. The company is expected to report earnings again on November 5.
Bullish trading was also seen in Hologic (HOLX), Vodaphone (VOD), and Wells Fargo (WFC).
Thursday’s Bearish Trading
Options activity picked up in RR Donnelly (RRD) intraday Thursday. Shares fell sharply, to $10.10, after Google blamed its earnings pre-release on the printing company. RRD is now down 26 cents to $10.59 in heavy trading of 8.3 million shares. By way of comparison, average daily volume in RRD is 1.8 million shares. Meanwhile, 21,000 options traded on the stock, which is 12.5X the daily average. About 17,000 puts and 4,000 calls so far. October 10 and 11 puts are the most actives in the Chicago-based printing and publishing company.
Bearish trading was also seen in Lamar Advertising (LAMR), Smithfield Foods (SFD), and Dollar Thrifty (DTG).
Index Recap
Trading in the index options market was active Thursday due to the expiration. The settlement values for many cash index products like the S&P 500 Index (.SPX) are computed using Friday morning stock prices. Therefore, the last day to trade the contracts is the Thursday before expiration Friday. About 780,000 calls and 720,000 puts traded across all index products. SPX October 1,450 puts and calls were the most actives. The index was down 6.65 to 1,454.27 and some investors were liquidating positions in these near-the-money contracts before they expire.
Analyzing the ETF Market
Oil Service Holders (OIH) was up 20 cents to $41.31 and some investors are possibly looking for a drop in the ETF before the weekend. Morning trades on OIH included several lots of October 41 puts, which are 31 cents out-of-the-money and expire after Friday. More than 27,000 contracts traded against 14,072 in open interest. If shares hold at $41 or above through the end of this week, the contract expires worthless and any premium paid is lost (unless it is closed out before the expiration). OIH is a fund that holds leading oil drilling and service companies. Two of its important components ? Baker Hughes (BHI) and Schlumberger (SLB) ? are due to release earnings Friday morning.
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