Your daily option s trading wrap up. Sentiment Stock market averages are
holding gains with help from GDP data Friday. The report, released before the
bell, showed economic growth at an annual rate of 3.1 percent in the fourth
quarter. It marked an improvement from 3.8% in the third and was also better
than economist estimates of 3.9%. The rest of the day's news was mixed. The
University of Michigan reported that its index of consumer sentiment declined to
67.5 in late-March, down from 68.2 the month before and slightly worse than the
68.0 that was expected. Meanwhile, Oracle (NASDAQ: ORCL ) is helping the
tech-heavy NASDAQ on better-than-expected earnings, but Research In Motion
(NASDAQ: RIMM ) fell more than 11% on disappointing guidance due to new product
and spending plans. Nevertheless, the Dow Jones Industrial Average is up for a
third day and has added 60 points on the session. The NASDAQ added 9. The CBOE
Volatility Index (CBOE: VIX ) slipped .14 to 17.86, but off session lows of
17.07. Trading is slowing a bit, with 8 million calls and 6.6 million puts
traded so far. Bullish Flow 44,000 calls traded in Eastman Kodak (NYSE: EK )
through midday. Typical volume in the first hour is less than 900 contracts.
Shares are up 33 cents to $3.46, as investors brace for an ITC review of patent
case involving Kodak vs. Apple (NASDAQ: AAPL ) and RIM. If successful, Kodak
could receive more than $1 billion in royalty payments, reports Bloomberg,
citing Chief Executive Antonio Perez. The decision is expected this afternoon.
There seems to be some optimism building, EK is up and volume in the EK April 4
Calls is approaching 11,000 (64% on the Ask). April 3.5, July 4, and July 5
calls are seeing brisk trading as well. Yahoo (NASDAQ: YHOO ) adds 14 cents to
$16.97 and the YHOO Apr July 18 Call Spread is apparently bought at 73 cents,
23,000 times this morning on the International Securities Exchange. It might be
a roll (closing April and opening July) or closing a spread altogether. Open
interest in the YHOO April 18 Calls is 125,271 contracts and the biggest
position in Yahoo today. In any case, todays spread trader might be selling the
position on the view that its becoming less likely that the stock will move
beyond $18 through the April expiration. The probability of that happening is
27%. The contract is 6.1% out-of-the-money with three weeks of life remaining.
Market is 23 to 25 cents. Find more option analysis and trading ideas at Options
Trading Strategies . Bearish Flow The biggest options trade Friday morning is in
the SPYders SPDR S&P 500 (NYSE: SPY ) after an investor sold 65,000 SPY April
125 Puts at 51 cents each. They also sold 20,000 SPY May 125 Puts at $1.61.
Shares are up 83 cents to $131.73 and the same investor bought 36,000 SPY July
125 Puts at $3.31. July puts look opening and the action is possibly rolling of
a hedge, or closing out the April and May 125s to open a smaller position in
July 125s. Implied Volatility Mover Bristol-Myers (NYSE: BMY ) is up $1.13 to
$27.56 and options are heavily traded today after the FDA approved ipilimumab,
or Yervoy, for melanoma. 82,000 calls and 25,000 puts traded so far. The top
trade surfaced at noon when 1294 BMY April 27 Puts traded on the 94-cent bid and
might be an opening put writer on the news. The next biggest trade is a
955-block of BMY April 27 Calls on the 40-cent bid, which might be a liquidating
trade. BMY April 27 Calls have now traded more than 20,000 contracts vs. 25,875
in open interest. April 26 and 28 call options are the next most actives.
Implied volatility has eased 5% to 20.5. Options Flow Bearish activity detected
in Fuqi International (NASDAQ: FUQI ), with 2968 puts trading, or five times its
recent average daily put volume. Bullish flow detected in RadioShack (NYSE: RSH
), with 20,965 calls trading, or five times its recent average daily call
volume. Bearish activity detected in Yamana Gold (NYSE: AUY ), with 20,519 puts
trading, or seven times its recent average daily put volume. Increasing volume
is also being seen in Oracle (NASDAQ: ORCL ), Research In Motion (NASDAQ: RIMM
), and Best Buy (NYSE: BBY ). 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.
