STOCKS NEWS US-Mirant call options attract buying interest

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1418 ET 13April2009 Trader says Mirant calls in demand

Option traders have been loading up on power producer Mirant Corp's call options as its shares were on either side of unchanged at $13.15 in afternoon trade. 'The options indicate there could be more as the stock has moved above the 50-day average and edges toward the next level of the 100-day average,' said optionMonster.com founder Pete Najarian in comments on the Website. The options are unusually active with buyers of the upside $15 calls in both April and May expirations. The normal volume for Mirant is 1,478 contracts and yet both the Mirant April and May $15 calls have surpassed the daily total volumes. The open Interest in both have been exceeded with the April calls trading for 15 cents and the May calls fetching 40 cents a piece earlier, he said. According to Trade Alert, sentiment based on option order flow is 73 percent bullish. In all, about 12,000 calls and 327 puts traded.

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1343 ET 13April2009
Traders turn optimistic on Marriott

Shares of hotel operator Marriott International Inc rose 5 cents to $19.24 in afternoon trade. Option traders have been scooping up calls in the April and May contracts and appear to be looking for continued upward price movement on the stock, said Interactive Brokers Group senior market analyst Andrew Wilkinson in a note. At the April $20 strike price, 4,100 calls were bought for an average premium of 38 cents apiece. Shares would need to continue to rally by an additional 4 percent from a share price of $19.57 for investors to break even at $20.38 by expiration this coming Friday. He noted that the bullishness spread to the May $22.50 strike price where 1,600 calls were bought for about 52 cents. The most optimistic of traders selected the May $25 strike and picked up about 1,000 calls for 20 cents apiece. Late in the session, about 22,000 calls and 1,629 puts traded in Marriott, six times the normal combined volume, according to Trade Alert.

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1335 ET 13April2009
Players focus on Monster Worldwide calls

Shares of jobs website operator Monster Worldwide Inc rose $1.45 to $11.96 in afternoon trade. With April options expiring on Friday, Monster bulls appear to be selling calls at the $12.50 line in exchange for buying the same strike at the May expiration, said Andrew Wilkinson, senior market analyst at Interactive Brokers Group in a note. Around 3,200 April calls traded Monday morning with premiums ranging between 15 and 35 cents. Most appeared to trade to the bid or were put up for sale. By writing April calls, investors were able to defray the cost of getting long into May by as much as 30 percent. The May calls at the $12.50 strike cost around $1. 'Neither strike price carries much by way of open interest, indicating that this is fresh positioning for a rebound in the fortune of the company,' he said. The danger to investors is that shares continue to rally through Friday and settle above the strike price. 'What these call buyers are looking for is bread today and jam tomorrow,' he added.

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1303 ET 13April2009
Goldman attracts call spreaders before results

Goldman Sachs shares rose 3.25 percent to $128.25 in afternoon trade ahead of earnings due out on Tuesday before the bell. The top options trades of the day are: 3,000 April $125-$135 call spreads, bought for $4.50 and tied to shares at $129.10, said WhatsTrading.com option strategist Frederic Ruffy. In all, about 100,000 calls and 77,000 puts traded in Goldman, or about three times the expected for midday, according to Trade Alert. Options implied volatility rose to 69 percent from three-month lows of around 64 percent late on Thursday. The implied volatility skew between April (99 percent) and May (60 percent) hints at a possible earnings gap move of $11.25 per share, or 8.8 percent, when Goldman releases its results, Ruffy said.

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1154 ET 13April2009
Warner Music rallies after upgrade

Shares of Warner Music Group rallied on Monday, after the company was upgraded at Goldman Sachs, which wrote that music industry trends were stabilizing after six months of declines.

The firm also wrote that the company's management had shown 'continued superior execution,' resulting in nine consecutive quarters of album market share gains in the United States. For details, see

The stock rose 13 percent to $3.49.

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1143 ET 13April2009
Cisco shares could rise by 50 pct: Barron's

Shares of Cisco Systems could rise by more than 50 percent, Barron's wrote in its April 13 edition.

Quoting Brian Nelson, who helps run the $3.8 billion Charter Fund on the behalf of Invesco Aim, Barron's wrote that there was significant upside for Cisco as information technology budgets rebound. For details, see

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1133 ET 13April2009
Genworth rejected for TARP money, shares tumble

Shares of Genworth Financial tumbled on Monday, after the U.S. Treasury rejected the company's bid for new capital.

The life and mortgage insurance company said the Office of Thrift Supervision had failed to approve its application to become a savings and loan holding company. Genworth had planned to buy Interbank FSB to be eligible for TARP money. For details, see

Shares of Genworth shed 21 percent to $2.17.

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1122 ET 13April2009
Markets extend losses ahead of earnings

Major U.S. indexes fell on Monday, extending their losses after Boeing Co issued a profit warning and energy stocks retreated on falling oil prices.

Also weighing on sentiment was General Motors after a newspaper report that the Treasury Department was directing the automaker to prepare for a bankruptcy filing by June 1. For details, see

The Dow Jones industrial average fell 1.3 percent to 7,978.64 while the S&P 500 lost 0.9 percent to 848.57 and the Nasdaq was off 1.2 percent to 1,632.97.

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