Sentiment Stock market averages opened higher on upbeat jobs data, but another
rally in crude is keeping a lid on investor enthusiasm late-Friday. Before the
opening bell on Wall Street, the Labor Department reported that the U.S. economy
added 216,000 jobs in March and the unemployment rate fell to 8.8% from 8.9%.
Economists were looking for 185,000 new jobs and the rate of unemployed to hold
steady at 8.9%. Stocks rallied around the news. Separate data released later
showed the PMI Manufacturing Index down to 61.2 in March, from 61.4 and in-line
with expectations. However, Construction Spending fell 1.4% in February, twice
as much as expected. The stock news remains light ahead of the
earnings-reporting period, but the exchanges are back in focus after NASDAQ OMX
Group (NASDAQ: NDAQ ) and the Intercontinental Exchange (NYSE: ICE ) teamed up
to make a bid for NYSE Euronext (NYSE: NYX ). However, any enthusiasm about
mergers or jobs data is being held in check by rally in crude oil. Prices are
now up $1.22 to $107.94 and setting fresh session highs heading into the
weekend. The Dow Jones Industrial Average is up 46 points, but down 54 from its
best levels of the day. The NASDAQ gained 4. Trading in the options market was
active early, but slowing in afternoon trading. 7.8 million calls and 6.4
million puts traded so far. Bullish Flow Yahoo (NASDAQ: YHOO ) adds 21 cents to
$16.89 and the YHOO Jul 18 – Jan 20 Call Spread is sold at 15 cents, 15,000
times. July calls were bought and January 20 calls sold, in what might be a
closing trade or a roll, as both contracts have substantial open interest. On
the other hand, the investor might be opening a new spread betting that shares
will rally beyond $18 through the July expiration, but not above $20 through
January 2012. Citi (NYSE: C ) adds 4 cents to $4.46 and 137,000 call options
traded on the bank in the first hour Friday. The volume is almost double the
normal and 10 times the day's put volume so far. The biggest trade is a block
of 29,000 C May 5 Calls at the 3-cent asking price. 32,000 now traded vs.
748,000 in open interest. April 4.5, Sep 5 and Sep 5.5 calls are seeing interest
as well. Gains in Citi shares and increasing call volume early Friday comes
ahead of an April 18 earnings report and a 1-for-10 reverse split scheduled for
May 6. Find more option analysis and trading ideas at Options Trading Strategies
. Bearish Flow Boston Scientific (NYSE: BSX ) adds 18 cents to $7.37 and morning
trades include a multi-exchange sweep of 4,278 BSX April 7 Puts at 15 cents,
which is an opening customer buyer, according to International Securities
Exchange data. 5,000 now traded. No news on the stock today. The company is due
to present at an American College of Cardiology conference on April 4. Implied
Volatility Mover CBOE Volatility Index (CBOE: VIX ) is down 1.18 to 16.56 and
returning to levels last seen on Feb. 18, the trading day before the S&P 500
came under pressure on concerns about rallying crude oil prices. Crude bubbled
up almost 5% to $96 per barrel on Feb. 22 on worries about escalating conflict
in Libya. Although crude prices have moved beyond $106 since that time, the S&P
500 has recovered most of the losses sustained from Feb. 18 to Mar. 16 and is
within striking distance of its Feb. 18 52-week high. Meanwhile, VIX has
plummeted 47% since the mid-March multi-month spike of 31.28. The top options
trade in the fear gauge today is a VIX April 27.5 – Jun 24 Put Spread , sold
at $4.075, 20,000 times and probably a roll of a bearish position in the VIX
from April to June. Option Flow Bullish flow detected in Under Armour (NYSE: UA
), with 5699 calls trading, or three times its recent average daily call volume.
Bullish flow detected in Medivation (NASDAQ: MDVN ), with 4396 calls trading, or
twice its recent average daily call volume. Bullish flow detected in Office
Depot (NYSE: ODP ), with 7261 calls trading, or six times its recent average
daily call volume. Increasing volume is also being seen in NYSE Euronext (NYSE:
NYX ), GM (NYSE: GM ) and MGM Resorts (NYSE: MGM ). Frederic Ruffy is the Senior
Options Strategist at Whatstrading.com , a site dedicated to helping traders
make sense of the complex and fragmented nature of listed options trading.
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