Your daily options trading wrap up. Sentiment Stock market averages are holding
gains, as upbeat economic data trumped uninspiring earnings from Google (NASDAQ:
GOOG ) and Bank of America (NYSE: BAC ). The Dow Jones Industrial Average is up
63 points and the tech-heavy NASDAQ with 4. The CBOE Volatility Index (CBOE: VIX
) lost .79 to 15.48. Options are actively traded due to the expiration, with 8.3
million calls and 7.3 million puts traded so far. Bullish Flow Google (NASDAQ:
GOOG ) shares are down $45.07 to $533.44 and options are seeing very heavy
trading after the Internet giant reported a quarterly profit of $8.08 per share,
which was two pennies shy of Street estimates. Although the EPS number didnt
miss by much, the concern seems to be over profit margins. Operating expenses
surged to $2.84 billion from $1.84 billion the year before. CEO Larry Page has
pledged to invest heavily in new technology and other opportunities. Some
analysts worry that the company is investing in growth at the expense of profit
margins. Meanwhile, 343,000 options have traded in Google, 63% in the expiring
front-month options. April 530, 535, and 540 puts are the most actives. Beyond
the month of April, the most active is the GOOG May 560 Call . It has traded
5,140 contracts. Open interest is 630 contracts, as some bold players might be
taking positions on hopes for a rebound towards $560 through the May expiration
which represents a 5.1% rally over the next five weeks. Bearish Flow Cemex
(NYSE: CX ) adds 2 cents to $8.78 and an investor buys a 5000-contract block of
CX Jul 9 Puts at 39 cents each. Looks opening and possibly tied to 173,000
shares at $8.75. Shares of the Mexican cement company are up 1.9% in the past
three days, but down 18% year-to-date. Earnings were last reported Feb. 3.
Implied Volatility Mover CBOE Volatility Index (CBOE: VIX ) is down 1.24 to
15.03 and on pace to set a new 52-week closing low, falling below the previous
one at 15.46 set on January 14. VIX hit a low of 14.92 this morning and is now a
far cry (down 52%) from the multi-month high of 31.28 set on March 16. Concerns
about events overseas the Japan nuke crisis, European debt problems, rallying
crude amid conflict in Middle East, North Africa are perhaps taking a backseat
to domestic news heading into the first-quarter earnings reporting season.
Consequently, anxiety levels have eased and the market's "fear gauge" is
back to 15. Meanwhile, in VIX options action Friday, a noteworthy early trade is
a VIX Sep 16 – 20 (2X1) Put Ratio Spread , bought at 1.25, 15,000 times and
might be a bet that the volatility index will sit near 16 when the September VIX
options expiration rolls around. (30,000 VIX Sep 16 Puts sold at 25 cents each).
Options Flow Bullish flow detected in Mylan (NASDAQ: MYL ), with 7149 calls
trading, or four times the recent average daily call volume. Bullish flow
detected in Brocade (NASDAQ: BRCD ), with 33,005 calls trading, or four times
the recent average daily call volume. Bullish flow detected in Avon Products
(NYSE: AVP ), with 6365 calls trading, or three times the recent average daily
call volume. Increasing volume is also being seen in Merck (NYSE: MRK) , Johnson
& Johnson (NYSE: JNJ ), and Assured Guaranty (NYSE: AGO ). 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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