Real-time equity news
U.S. stock market report 1459 ET 10Aug2010 BofA weekly $13 puts surge before Fed statement
Bank of America's volume in their weekly August $13 put strikes surged, with lots traded at the 3-cent ask price, just ahead of the Fed statement, said WhatsTrading.com option strategist Frederic Ruffy. The top trade was an 800 lot. A total of 28,550 puts crossed the tape in the weekly options which expire this Friday, with 95 percent of the volume on the ask price, according to Trade Alert. The strike is home to current open interest of 2,143 contracts. The U.S. Federal Reserve said it would begin funneling proceeds from its maturing mortgage bonds into longer-term government debt in an effort to support a sputtering economic recovery. For details, see TEXT:. The stock which saw a move up to $13.77 on the headlines, is now off 17 cents to $13.74 in the afternoon session.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1415 ET 10Aug2010
Wall Street trims losses after Fed statement
U.S. stocks trimmed losses on Tuesday after the Federal Reserve said it would begin channeling proceeds from its maturing mortgage bonds into longer-term government debt in an effort to support a flagging economic recovery.
The Dow Jones industrial average shed 39.51 points, or 0.37 percent, to 10,659.24. The Standard & Poor's 500 Index dipped 5.87 points, or 0.52 percent, to 1,121.92. The Nasdaq Composite Index lost 29.79 points, or 1.29 percent, to 2,275.90.
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Reuters Messaging: caroline.valetkevitch.reuters.com@reuters.net
1409 ET 10Aug2010
Options traders bet Dell will hold above $12
Shares of Dell Inc fell 4.08 percent to $12.46 in afternoon trading, but option traders are betting that shares will hold up. Shares had been holding support at $13 since climbing off a year low of $11.72 at the start of July. The PC maker's price continues the long-term downtrend from a two-year high of $17.52 set in April, said optionMonster analyst Chris McKhann in comments on the firm's website. Dell option volume is more than twice this month's daily average, with more than 36,000 contracts traded. The most actives are the February $9 and $12 put strikes. McKhann said a large trade involved 8,000 puts each of those two strikes, more than 16 times the open interest in each. The Feb $9 puts were bought for 32 cents per contract, while the Feb $12 puts were sold, most for $1.09 each. 'This credit spread takes in 77 cents, which will be the profit if shares hold up above $12 through expiration,' he said. 'The maximum loss is capped through the ownership of the lower-strike puts. It will be $1.91 if Dell is below $9.'
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1344 ET 10Aug2010-Jazz Pharma gets pre
earnings call spread
Jazz Pharmaceuticals Inc is set to report quarterly results after the close. The drugmaker has a fairly solid track record with its earnings reports, beating the consensus estimate in three of the past four quarters, said Schaeffer's Investment research analyst Sarah Wasserman. On Monday, option players placed their pre-earnings bets on Jazz, with roughly 7,000 contracts traded -- four times the stock's expected single-session volume of 1,687 contracts. Traders showed a preference for calls, with 5,056 of these bullish bets traded, she said on the firm's website. The Sept $7.50 call was the most popular, with 1,198 lots changing hands. Upon further review, she said it seems the majority of these calls were part of a two-part spread where 1,000 Sept $7.50 calls traded at the ask price, while 1,000 Sept $12 calls traded at the bid price. By initiating a long call spread, this trader is counting on Jazz to climb up to -- but not above -- the $12 level in the next several weeks, she said. Jazz shares fell 2.19 percent to $9.37 during the afternoon session.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1317 ET 10Aug2010
Options player bets on higher bid for Genzyme
During the past 30 days, shares of U.S. biotech firm Genzyme have risen a significant amount due to a takeover offer from Paris-based Sanofi-Aventis. But one trader is positioning for a further rise and a potential raise of the offer, said Steve Place, founder of investingwithoptions.com. He noticed during the lunchtime session, a trader bought what is known as a butterfly call spread. This is a limited risk, limited reward play that makes money if the stock closes within a particular range by the end of the contract expiration. Specifically, Place noted the January 2011 $70/$75/$80 butterfly call spread was bought 7,500 times for a cost of 1.90 per spread. So the trader is betting nearly $1.5 million that by January 2011 expiration, Genzyme will be between $70 and $80. 'This position may be an add on (to) an existing position, but it seems as though someone is expecting a competing takeover bid to enter the market by the end of the year,' Place said. Genzyme shares rose 52 cents to $67.98 during the afternoon.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1243 ET 10Aug2010
Call buyers target ProShares UltraShort Euro ETF
The ProShares UltraShort Euro exchange-traded fund rose 1.74 percent to $21.60. Its options volume is seven times the average daily turnover, driven by call buyers in the August and September $21 call options, said WhatsTrading.com option strategist Frederic Ruffy. Traders favored the Sept $21 call strike, with 4,800 contracts traded and 63 percent trading at the ask price, he said. Another 2,189 August $21 calls changed hands, with 32 percent traded mid-market and 52 percent at the ask price. 'Volume exceeds open interest in both contracts and the activity is perhaps bullish trading on the dollar in anticipation of euro weakness after today's Fed meeting on interest rates,' he said. According to the ProShares website, EUO 'seeks daily investment results, before fees and expenses, that correspond to twice (200 percent) the inverse (opposite) of the daily performance of the U.S. dollar price of the euro.' Thus, 'bullish trading in the options reflects bullish bets on the buck,' Ruffy said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net Keywords: MARKETS STOCKSNEWS
COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
U.S. stock market report 1459 ET 10Aug2010 BofA weekly $13 puts surge before Fed statement
Bank of America's volume in their weekly August $13 put strikes surged, with lots traded at the 3-cent ask price, just ahead of the Fed statement, said WhatsTrading.com option strategist Frederic Ruffy. The top trade was an 800 lot. A total of 28,550 puts crossed the tape in the weekly options which expire this Friday, with 95 percent of the volume on the ask price, according to Trade Alert. The strike is home to current open interest of 2,143 contracts. The U.S. Federal Reserve said it would begin funneling proceeds from its maturing mortgage bonds into longer-term government debt in an effort to support a sputtering economic recovery. For details, see TEXT:. The stock which saw a move up to $13.77 on the headlines, is now off 17 cents to $13.74 in the afternoon session.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1415 ET 10Aug2010
Wall Street trims losses after Fed statement
U.S. stocks trimmed losses on Tuesday after the Federal Reserve said it would begin channeling proceeds from its maturing mortgage bonds into longer-term government debt in an effort to support a flagging economic recovery.
The Dow Jones industrial average shed 39.51 points, or 0.37 percent, to 10,659.24. The Standard & Poor's 500 Index dipped 5.87 points, or 0.52 percent, to 1,121.92. The Nasdaq Composite Index lost 29.79 points, or 1.29 percent, to 2,275.90.
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Reuters Messaging: caroline.valetkevitch.reuters.com@reuters.net
1409 ET 10Aug2010
Options traders bet Dell will hold above $12
Shares of Dell Inc fell 4.08 percent to $12.46 in afternoon trading, but option traders are betting that shares will hold up. Shares had been holding support at $13 since climbing off a year low of $11.72 at the start of July. The PC maker's price continues the long-term downtrend from a two-year high of $17.52 set in April, said optionMonster analyst Chris McKhann in comments on the firm's website. Dell option volume is more than twice this month's daily average, with more than 36,000 contracts traded. The most actives are the February $9 and $12 put strikes. McKhann said a large trade involved 8,000 puts each of those two strikes, more than 16 times the open interest in each. The Feb $9 puts were bought for 32 cents per contract, while the Feb $12 puts were sold, most for $1.09 each. 'This credit spread takes in 77 cents, which will be the profit if shares hold up above $12 through expiration,' he said. 'The maximum loss is capped through the ownership of the lower-strike puts. It will be $1.91 if Dell is below $9.'
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1344 ET 10Aug2010-Jazz Pharma gets pre
earnings call spread
Jazz Pharmaceuticals Inc is set to report quarterly results after the close. The drugmaker has a fairly solid track record with its earnings reports, beating the consensus estimate in three of the past four quarters, said Schaeffer's Investment research analyst Sarah Wasserman. On Monday, option players placed their pre-earnings bets on Jazz, with roughly 7,000 contracts traded -- four times the stock's expected single-session volume of 1,687 contracts. Traders showed a preference for calls, with 5,056 of these bullish bets traded, she said on the firm's website. The Sept $7.50 call was the most popular, with 1,198 lots changing hands. Upon further review, she said it seems the majority of these calls were part of a two-part spread where 1,000 Sept $7.50 calls traded at the ask price, while 1,000 Sept $12 calls traded at the bid price. By initiating a long call spread, this trader is counting on Jazz to climb up to -- but not above -- the $12 level in the next several weeks, she said. Jazz shares fell 2.19 percent to $9.37 during the afternoon session.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1317 ET 10Aug2010
Options player bets on higher bid for Genzyme
During the past 30 days, shares of U.S. biotech firm Genzyme have risen a significant amount due to a takeover offer from Paris-based Sanofi-Aventis. But one trader is positioning for a further rise and a potential raise of the offer, said Steve Place, founder of investingwithoptions.com. He noticed during the lunchtime session, a trader bought what is known as a butterfly call spread. This is a limited risk, limited reward play that makes money if the stock closes within a particular range by the end of the contract expiration. Specifically, Place noted the January 2011 $70/$75/$80 butterfly call spread was bought 7,500 times for a cost of 1.90 per spread. So the trader is betting nearly $1.5 million that by January 2011 expiration, Genzyme will be between $70 and $80. 'This position may be an add on (to) an existing position, but it seems as though someone is expecting a competing takeover bid to enter the market by the end of the year,' Place said. Genzyme shares rose 52 cents to $67.98 during the afternoon.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1243 ET 10Aug2010
Call buyers target ProShares UltraShort Euro ETF
The ProShares UltraShort Euro exchange-traded fund rose 1.74 percent to $21.60. Its options volume is seven times the average daily turnover, driven by call buyers in the August and September $21 call options, said WhatsTrading.com option strategist Frederic Ruffy. Traders favored the Sept $21 call strike, with 4,800 contracts traded and 63 percent trading at the ask price, he said. Another 2,189 August $21 calls changed hands, with 32 percent traded mid-market and 52 percent at the ask price. 'Volume exceeds open interest in both contracts and the activity is perhaps bullish trading on the dollar in anticipation of euro weakness after today's Fed meeting on interest rates,' he said. According to the ProShares website, EUO 'seeks daily investment results, before fees and expenses, that correspond to twice (200 percent) the inverse (opposite) of the daily performance of the U.S. dollar price of the euro.' Thus, 'bullish trading in the options reflects bullish bets on the buck,' Ruffy said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net Keywords: MARKETS STOCKSNEWS
COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.