Your daily option s trading wrap up. Sentiment Stocks opened sharply lower and
remain in the red late-Tuesday. Alcoa (NYSE: AA ) shares are down 6.3% and
easily the biggest loser in the Dow Jones Industrial Average after the
aluminum-maker kicked off the earnings-reporting season with EPS numbers that
beat Street views, but revenues that fell short of expectations. The economic
calendar included a Trade Balance of -$45.8 billion in February, which was
in-line with expectations. The primary focus seems to be some pre-earnings
jitters, however, and the problems facing areas around Tokyo. The Dow Jones
Industrial Average is down 126 points and the NASDAQ lost 31. The CBOE
Volatility Index (CBOE: VIX ) gained .86 to 17.45. Trading in the options market
is busy and clearly more defensive than in recent days with 9.3 million calls
and 8.1 million puts traded so far. Bullish Flow Bank of America (NYSE: BAC )
BAC April 14 Calls are the most actively traded equity options contract Tuesday
morning. The top two trades are 10,000-contract blocks at 6 cents each. Shares
are down 12 cents to $13.37 and these calls are now 4.5% out-of-the-money.
36,000 contracts have traded and open interest is 364,528, which is the fourth
largest position in BofA. Delta is .17, as the contract has three and half days
of life remaining. Some investors are likely closing out positions. Others might
be taking new positions and hoping for a post-earnings rally in shares. BofA is
due to release earnings the morning of options expiration Friday. Find more
option analysis and trading ideas at Options Trading Strategies . Bearish Flow
Steve Smith notes for Whatstrading.com today that Target (NYSE: TGT ) shares are
up 45 cents to $49.70 and there is notable volume in the TGT Oct 48 Puts as two
large blocks trade at the offer of $3 and $3.05. A total of 10,000 contracts now
traded. Shares of TGT have been one of the worst performers among big box
general merchandise retailers declining some 17% for the year to date. While
open interest is sufficient to cover, sentiment data suggest opening put
purchases in TGT today. Some might be tied to stock, as two blocks totaling
93,000 shares (53,000 and 40,000) also traded this morning. The company offered
an investor update today at an International Securities Exchange Group Retail
Summit. Expects EPS of $8 and revenues of $100 billion by 2016/2017. Implied
Volatility Mover Two days of put buying and then a tumble for Longtop Financial
(NYSE: LFT ). Shares are down $4.50 to $26.55 and falling to session lows, near
52-week lows, in heavy trading. Options volume is six times the average daily,
with another 14,000 puts and 3,200 calls traded. Looks like some investors are
bracing for additional downside in May 20, 22.5 and 25 puts, which are the most
actives. April 25 and 30 puts are busy as well. Implied volatility jumped 21% to
97. No news on the stock, but it seems that some investors had been anticipating
today's volatility in the stock over the past two days. Options Flow Bullish
flow detected in Chimera Investment (NYSE: CIM ), with 11,772 calls trading, or
nine times its recent average daily call volume. Bullish flow detected in
PowerShares DB US Dollar Index Bullish Fund (NYSE: UUP ), with 44257 calls
trading, or three times its recent average daily call volume. Bearish activity
detected in CNinsure (NASDAQ: CISG ), with 5383 puts trading, or eight times its
recent average daily put volume. Increasing volume is also being seen in
Petroleo Brasileiro (NYSE: PBR ), Tyco (NYSE: TYC ), and iShares Silver Trust
(NYSE: SLV ). 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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