U.S. stock market report
1730 ET 27July2010
Economic diary for July 28
Economic data on tap for Wednesday includes durable goods for June and the Federal Reserve's Beige Book. See
Reuters Messaging: leah.schnurr.reuters.com@reuters.net
1703 ET 27July2010
Options risk gauge sits just below key level
Wall Street's fear gauge, the so-called CBOE Volatility Index or VIX, rose 2.02 percent to 23.19 as the S&P 500 index edged lower. The VIX remains just below its
200
day moving average of 23.37, according to optionmonster analyst Chris McKhann. The VIX closed below that level for the second straight session for the first time since May 3 just three days before the May 6 flash crash. 'If the VIX can stay below this level, it is a good sign for the overall market as some of the near-term fear diminishes,' he said. Since early May, a 23 volatility reading has been pivotal as the VIX bounced off of that level and shot up to a near 50 reading and eventually came down to 23 by June 21. Then it bounced again to 37.50 in early July. 'This 23 level is important because we can break one way or the other,' he added. More importantly, even though VIX futures contracts were down, McKhann noted they still carry a premium to spot VIX, indicating traders expect significantly higher volatility for the rest of 2010.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1645 ET 27July2010
Wall St dinged by consumer data, mixed results
The S&P snapped a three-day winning streak on Tuesday after mixed earnings reports and a fall in consumer confidence, but analysts said U.S. stocks were taking a breather and the rally could pick back up.
Reuters Messaging: leah.schnurr.reuters.com@reuters.net
1614 ET 27July2010
Pfizer call option volume pops up
Option traders exchanged about 284,000 contracts in Pfizer Inc, or 4.2 times the usual volume, according to Trade Alert. The activity was led by the trading of 271,000 calls on the stock of the drugmaker. Its shares rose 1.66 percent to $15.27. The action included large blocks of out-of-the-money PFE calls: 50,000 December $18 calls at 15 cents per contract, 50,000 December $17 calls at 30 cents apiece, 50,000 September $17 calls at 10 cents each, 50,000 August $16 calls at 11 cents per contract and 30,000 December $16 calls at 58 cents a contract. 'Sources tell us this is a brokerage firm crossing blocks for account swaps, not a spread or directional play on the pharmaceutical maker,' said WhatsTrading.com option strategist Frederic Ruffy. Reuters Messaging: doris.frankel.reuters.com@reuters.net
1551 ET 27July010
Pitney Bowes gets large put sale
Option traders are looking for Pitney Bowes to hold onto its gains of the last month, said optionMonster analyst Chris McKhann in comments on the firm's website. Pitney, a U.S.-based provider of mail processing equipments, rose 5 cents to $24.67. PBI is up from levels around $22 coming into July but has yet to return to resistance at $26 that held in April and October of 2009. Pitney's earnings are due on Aug. 3, and at least one trader is trying to take advantage of the inflated options implied volatility. The average PBI volume is 700 contracts, but more than 5,000 lots traded earlier, 90 percent of them puts. OptionMonster systems show 4,300 Aug $24 puts traded with the vast majority sold. A print of 1,710 was sold for 55 cents. Those holding short puts at expiration will be obligated to buy shares if PBI is below the strike sold. It appears these puts may be partly hedged by some short selling in the stock, which creates a range-bound position that will profit if PBI volatility is lower going forward than the price of those puts projects, he said..
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1530 ET 27July2010
MGM traders brace for volatility heading into earnings
MGM Mirage implied options volatility is starting to move amid active trading ahead of the casino and hotel operator's Aug. 3 earnings release, said Joe Cusick, senior market analyst at online brokerage optionsXpress. Its shares rose 3.1 percent to $11.30 and in the options market, about 71,000 contracts traded in MGM, or 2.8 times the average daily volume by late afternoon, according to Trade Alert. The activity included 50,000 calls and 22,000 puts. Meanwhile, implied volatility on the stock rose 3 percent to 70.5 percent and is up nearly 12 percent so far this week, Cusick said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net; Editing by Andrew Hay 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.
1730 ET 27July2010
Economic diary for July 28
Economic data on tap for Wednesday includes durable goods for June and the Federal Reserve's Beige Book. See
Reuters Messaging: leah.schnurr.reuters.com@reuters.net
1703 ET 27July2010
Options risk gauge sits just below key level
Wall Street's fear gauge, the so-called CBOE Volatility Index or VIX, rose 2.02 percent to 23.19 as the S&P 500 index edged lower. The VIX remains just below its
200
day moving average of 23.37, according to optionmonster analyst Chris McKhann. The VIX closed below that level for the second straight session for the first time since May 3 just three days before the May 6 flash crash. 'If the VIX can stay below this level, it is a good sign for the overall market as some of the near-term fear diminishes,' he said. Since early May, a 23 volatility reading has been pivotal as the VIX bounced off of that level and shot up to a near 50 reading and eventually came down to 23 by June 21. Then it bounced again to 37.50 in early July. 'This 23 level is important because we can break one way or the other,' he added. More importantly, even though VIX futures contracts were down, McKhann noted they still carry a premium to spot VIX, indicating traders expect significantly higher volatility for the rest of 2010.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1645 ET 27July2010
Wall St dinged by consumer data, mixed results
The S&P snapped a three-day winning streak on Tuesday after mixed earnings reports and a fall in consumer confidence, but analysts said U.S. stocks were taking a breather and the rally could pick back up.
Reuters Messaging: leah.schnurr.reuters.com@reuters.net
1614 ET 27July2010
Pfizer call option volume pops up
Option traders exchanged about 284,000 contracts in Pfizer Inc, or 4.2 times the usual volume, according to Trade Alert. The activity was led by the trading of 271,000 calls on the stock of the drugmaker. Its shares rose 1.66 percent to $15.27. The action included large blocks of out-of-the-money PFE calls: 50,000 December $18 calls at 15 cents per contract, 50,000 December $17 calls at 30 cents apiece, 50,000 September $17 calls at 10 cents each, 50,000 August $16 calls at 11 cents per contract and 30,000 December $16 calls at 58 cents a contract. 'Sources tell us this is a brokerage firm crossing blocks for account swaps, not a spread or directional play on the pharmaceutical maker,' said WhatsTrading.com option strategist Frederic Ruffy. Reuters Messaging: doris.frankel.reuters.com@reuters.net
1551 ET 27July010
Pitney Bowes gets large put sale
Option traders are looking for Pitney Bowes to hold onto its gains of the last month, said optionMonster analyst Chris McKhann in comments on the firm's website. Pitney, a U.S.-based provider of mail processing equipments, rose 5 cents to $24.67. PBI is up from levels around $22 coming into July but has yet to return to resistance at $26 that held in April and October of 2009. Pitney's earnings are due on Aug. 3, and at least one trader is trying to take advantage of the inflated options implied volatility. The average PBI volume is 700 contracts, but more than 5,000 lots traded earlier, 90 percent of them puts. OptionMonster systems show 4,300 Aug $24 puts traded with the vast majority sold. A print of 1,710 was sold for 55 cents. Those holding short puts at expiration will be obligated to buy shares if PBI is below the strike sold. It appears these puts may be partly hedged by some short selling in the stock, which creates a range-bound position that will profit if PBI volatility is lower going forward than the price of those puts projects, he said..
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1530 ET 27July2010
MGM traders brace for volatility heading into earnings
MGM Mirage implied options volatility is starting to move amid active trading ahead of the casino and hotel operator's Aug. 3 earnings release, said Joe Cusick, senior market analyst at online brokerage optionsXpress. Its shares rose 3.1 percent to $11.30 and in the options market, about 71,000 contracts traded in MGM, or 2.8 times the average daily volume by late afternoon, according to Trade Alert. The activity included 50,000 calls and 22,000 puts. Meanwhile, implied volatility on the stock rose 3 percent to 70.5 percent and is up nearly 12 percent so far this week, Cusick said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net; Editing by Andrew Hay 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.