Real-time equity news
U.S. stock market report
1710 ET 15Dec2010
Baidu option volume swells, volatility up
U.S.-listed shares of China's top search engine, Baidu Inc were under pressure and its option volume surged to 3.6 times the typical levels as investors reacted to the company's comments at the Reuters China Investment summit. Baidu senior vice president of business operations Haoyu Shen sees its top and bottom-line growth rates slowing next year. For details, see
Baidu shares sank 6.02 percent to $100.20. Option traders exchanged about
226,000 contracts and most of the volume was in the front
month December options, as players reacted to the Baidu news and subsequent volatility in the shares, said WhatsTrading.com options strategist Frederic Ruffy. The December $105 puts were the most actives on volume of 12,229 contracts, according to Trade Alert. The December $105 and $110 strike calls traded more than 11,000 contracts. The top trade was in the March calls which was a $140-$145 call spread that apparently sold at 20 cents, 1,242 times. Baidu option volatility rose 13.5 percent to 43 percent, Ruffy added.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1702 ET 15Dec2010
Bank of America, investors in settlement talks: WSJ
Bank of America Corp is in talks with a group of six investors to settle charges that it mishandled $16.5 billion in mortgages packaged into bonds, The Wall Street Journal reported on Wednesday.
The investor group, which includes Freddie Mac, PIMCO, BlackRock Inc and Allianz SE, told the bank in October that it had 60 days to respond to allegations that it did not properly service 115 bond deals comprising mortgages. The deadline for the bank's response was Thursday, the Journal report said. For details, see
Shares of BofA, a Dow component, rose 2.1 percent to $12.55 in extended trading.
Reuters Messaging: ryan.vlastelica.thomsonreuters.com@reuters.net
1630 ET 15Dec2010
Goldman Sachs recommends buy Paychex Jan options
With option prices at historically low levels, Goldman Sachs Group is recommending that investors buy January straddles or put options on Paychex Inc ahead of the payroll processor's Dec. 20 earnings after the close. GS equity derivative strategists see the potential for unusually high volatility on earnings given the new CEO that was appointed in September and the company's new sales strategy. 'With shares up 18 percent over the past three months, expectations are elevated,' they said. Goldman estimates PAYX options imply a 2.8 percent earnings day move versus a 3.3 percent median move over the past eight quarters. They recommend buying January $31 straddles for $1.55 to benefit from volatility on the event. 'January puts look similarly inexpensive and would be in-line with our analyst's negative view on shares,' they said. Buyers of straddles and puts risk losing their premium paid.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1605 ET 15Dec2010-Wall Street ends down after 3rd late sell
off
U.S. stocks ended lower on Wednesday, suffering a third late-day sell-off in a row, suggesting it may be difficult to chalk further gains as the year comes to a close.
For more please double click
Reuters Messaging: caroline.valetkevitch.reuters.com@reuters.net
1445 ET 15Dec2010
Speculators eye Amerisource call options
Drug wholesaler AmerisourceBergen Corp attracted a flurry of bullish option activity as about 10,000 calls traded by late afternoon, far above the average of 680 call contracts per day, according to Trade Alert. 'AmerisourceBergen has been consolidating after a big run, and the bulls are looking for a push into (December) expiration,' said optionMonster analyst David Russell on the firm's website. Russell was referring to trades in the December $32 and $33 strike calls, which expire on Friday after the close. 'The speculative frenzy comes the day after Goldman Sachs added the stock to its conviction buy list and the day before ABC holds its analyst day,' said WhatsTrading.com options strategist Frederic Ruffy. The top trade is a lot of 621 December $33 strike calls at a dime on the International Securities Exchange and an opening customer buyer, according to ISEE data. It was also part of a sweep of 2,683 contacts. The strike's volume traded 4,368 times versus 1,966 in open interest. It also looks like opening buyers of December $32, January $32 and January $33 calls. Implied volatility fell 3.5 percent to 26.5 percent, Ruffy said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1347 ET 15Dec2010
RIM option action turns busy ahead of earnings
Options traders in Research in Motion are jockeying for positions heading into the BlackBerry maker's quarterly earnings on Thursday. RIM shares fell 2.53 percent to $58.92 on the Nasdaq. In all, about 77,000 puts and 56,000 calls traded by 1:29 p.m. EST, exceeding its average daily level, according to Trade Alert. Directional sentiment based on option order flow is 40 percent bearish, 31 percent neutral and 29 percent bullish, Trade Alert data show.
The top trades are two blocks -- 9,591 and 9,000 contracts -- of January $50 puts at 66 cents per contract on the NYSE Amex exchange when the bid-ask was 63 to 66 cents, said WhatsTrading.com options strategist Frederic Ruffy. It looks like put buyers, he added. The strike had volume of more than 23,600 contracts. Ruffy noted that players are also taking positions in December $60, $62.5 and $65 calls, as well as December $60 puts. The demand for RIM options lifted the stock's option implied volatility to 44.5 percent, up 2.5 percent, ahead of the results, Ruffy added.
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
1710 ET 15Dec2010
Baidu option volume swells, volatility up
U.S.-listed shares of China's top search engine, Baidu Inc were under pressure and its option volume surged to 3.6 times the typical levels as investors reacted to the company's comments at the Reuters China Investment summit. Baidu senior vice president of business operations Haoyu Shen sees its top and bottom-line growth rates slowing next year. For details, see
Baidu shares sank 6.02 percent to $100.20. Option traders exchanged about
226,000 contracts and most of the volume was in the front
month December options, as players reacted to the Baidu news and subsequent volatility in the shares, said WhatsTrading.com options strategist Frederic Ruffy. The December $105 puts were the most actives on volume of 12,229 contracts, according to Trade Alert. The December $105 and $110 strike calls traded more than 11,000 contracts. The top trade was in the March calls which was a $140-$145 call spread that apparently sold at 20 cents, 1,242 times. Baidu option volatility rose 13.5 percent to 43 percent, Ruffy added.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1702 ET 15Dec2010
Bank of America, investors in settlement talks: WSJ
Bank of America Corp is in talks with a group of six investors to settle charges that it mishandled $16.5 billion in mortgages packaged into bonds, The Wall Street Journal reported on Wednesday.
The investor group, which includes Freddie Mac, PIMCO, BlackRock Inc and Allianz SE, told the bank in October that it had 60 days to respond to allegations that it did not properly service 115 bond deals comprising mortgages. The deadline for the bank's response was Thursday, the Journal report said. For details, see
Shares of BofA, a Dow component, rose 2.1 percent to $12.55 in extended trading.
Reuters Messaging: ryan.vlastelica.thomsonreuters.com@reuters.net
1630 ET 15Dec2010
Goldman Sachs recommends buy Paychex Jan options
With option prices at historically low levels, Goldman Sachs Group is recommending that investors buy January straddles or put options on Paychex Inc ahead of the payroll processor's Dec. 20 earnings after the close. GS equity derivative strategists see the potential for unusually high volatility on earnings given the new CEO that was appointed in September and the company's new sales strategy. 'With shares up 18 percent over the past three months, expectations are elevated,' they said. Goldman estimates PAYX options imply a 2.8 percent earnings day move versus a 3.3 percent median move over the past eight quarters. They recommend buying January $31 straddles for $1.55 to benefit from volatility on the event. 'January puts look similarly inexpensive and would be in-line with our analyst's negative view on shares,' they said. Buyers of straddles and puts risk losing their premium paid.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1605 ET 15Dec2010-Wall Street ends down after 3rd late sell
off
U.S. stocks ended lower on Wednesday, suffering a third late-day sell-off in a row, suggesting it may be difficult to chalk further gains as the year comes to a close.
For more please double click
Reuters Messaging: caroline.valetkevitch.reuters.com@reuters.net
1445 ET 15Dec2010
Speculators eye Amerisource call options
Drug wholesaler AmerisourceBergen Corp attracted a flurry of bullish option activity as about 10,000 calls traded by late afternoon, far above the average of 680 call contracts per day, according to Trade Alert. 'AmerisourceBergen has been consolidating after a big run, and the bulls are looking for a push into (December) expiration,' said optionMonster analyst David Russell on the firm's website. Russell was referring to trades in the December $32 and $33 strike calls, which expire on Friday after the close. 'The speculative frenzy comes the day after Goldman Sachs added the stock to its conviction buy list and the day before ABC holds its analyst day,' said WhatsTrading.com options strategist Frederic Ruffy. The top trade is a lot of 621 December $33 strike calls at a dime on the International Securities Exchange and an opening customer buyer, according to ISEE data. It was also part of a sweep of 2,683 contacts. The strike's volume traded 4,368 times versus 1,966 in open interest. It also looks like opening buyers of December $32, January $32 and January $33 calls. Implied volatility fell 3.5 percent to 26.5 percent, Ruffy said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1347 ET 15Dec2010
RIM option action turns busy ahead of earnings
Options traders in Research in Motion are jockeying for positions heading into the BlackBerry maker's quarterly earnings on Thursday. RIM shares fell 2.53 percent to $58.92 on the Nasdaq. In all, about 77,000 puts and 56,000 calls traded by 1:29 p.m. EST, exceeding its average daily level, according to Trade Alert. Directional sentiment based on option order flow is 40 percent bearish, 31 percent neutral and 29 percent bullish, Trade Alert data show.
The top trades are two blocks -- 9,591 and 9,000 contracts -- of January $50 puts at 66 cents per contract on the NYSE Amex exchange when the bid-ask was 63 to 66 cents, said WhatsTrading.com options strategist Frederic Ruffy. It looks like put buyers, he added. The strike had volume of more than 23,600 contracts. Ruffy noted that players are also taking positions in December $60, $62.5 and $65 calls, as well as December $60 puts. The demand for RIM options lifted the stock's option implied volatility to 44.5 percent, up 2.5 percent, ahead of the results, Ruffy added.
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.