Real-time equity news
U.S. stock market report
1730 ET 22Dec2010
Economic diary for Dec. 23
Economic data on tap for Thursday includes weekly initial jobless claims, November durable goods, the final reading of December consumer sentiment and new home sales for November.
Reuters Messaging: leah.schnurr.thomsonreuters.com@reuters.net
1720 ET 22Dec2010
Bank shares help keep alive Wall St rally
The S&P 500 rose on Wednesday to its highest level since the collapse of Lehman Brothers, led by bank stocks that have leapfrogged other sectors in December.
The banks -- epicenter of the credit crisis two years ago -- led indexes higher as a December run helped keep the market's year-end rally afloat. The KBW Bank Index rose 1.9 percent, led by regional institutions.
Reuters Messaging: leah.schnurr.thomsonreuters.com@reuters.net
1707 ET 22Dec2010
Options risk gauge closes at lowest level since July 2007
As U.S. stocks rose modestly, volatility was down substantially. The CBOE Volatility Index, or VIX, -- a key barometer of investor anxiety -- fell 6.31 percent to 15.45, its lowest level since July, 2007. 'The market seems to believe that a year-end rally will continue through next week,' said TD Ameritrade chief derivatives strategist Joe Kinahan. But he noted there are some headwinds in 2011 such as the European debt crisis and U.S. unemployment, which has not gone away. 'So what we are seeing is that many market participants believe these and some other economic roadblocks could rear their head in the first month or two of 2011,' he said. Meanwhile, VIX December futures settled this morning at 16.01. The January futures contract is now the front month and carries a sizable premium to spot VIX as well as the longer-dated contracts.
'We saw a firm bid today in the VIX futures and very active put selling and call buying in the options on the Volatility Index,' said Dan Deming, managing director of Stutland Volatility Group. 'The action in all three are indicating that there is a fair amount of market participants who want to hedge their long portfolio risk heading into the New Year.'
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1624 ET 22Dec2010
Option player sets up likely hedge in Financial ETF
The purchase of a massive block of March 2011 put options on the Financial Select Sector SPDR fund appears to be the work of a cautiously optimistic options strategist hedging a large position in the underlying shares, said Interactive Brokers Group options analyst Caitlin Duffy. Shares in the XLF, an exchange-traded fund designed to track the performance of the Financial Select Sector of the S&P 500 Index, rose 1.07 percent to $15.98. The investor appears to have established a delta neutral hedge, buying 1.5 million XLF shares, and picking up 50,000 protective puts at the March $15 strike for a premium of 39 cents per contract on a 0.30 delta. 'It seems the trader is positioning for continued bullish movement in the price of XLF shares, but opting to shell out extra premium as well for downside protection in case the sector does not perform as expected in the first few months of 2011,' she said. The fund's options implied volatility rose 5.7 percent to 20.88 percent late in the session, she added.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1542 ET 22Dec2010
Boston Scientific option volume pops up
Boston Scientific Corp's shares fell 1.27 percent to $7.75 on news the Internal Revenue Service is seeking at least $525 million in taxes stemming from an acquisition but the medical device company plans to dispute the finding. For details, see. The stock's options volume is 6.3 times greater than typical levels with about 26,000 puts and 20,000 calls traded near the close, according to Trade Alert.
The action is focused in the February $7 puts, which traded more than 22,500 times versus open interest of 7,997.
OptionMonster's data show the sale of 20,000 February $7 puts for 22 and 20 cents apiece. The put seller apparently thinks Boston Scientific has limited downside risk, but is also willing to own the stock at $7 if it falls back to that level, said optionMonster analyst David Russell. WhatsTrading.com options strategist Frederic Ruffy noticed a block of 14,000 Feb $7 puts traded on the International Securities Exchange, which could have been an opening position that was sold, But 2,500 of those puts were bought at 22 cents on CBOE. It was tied to stock, delta neutral, according to floor source, 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
1730 ET 22Dec2010
Economic diary for Dec. 23
Economic data on tap for Thursday includes weekly initial jobless claims, November durable goods, the final reading of December consumer sentiment and new home sales for November.
Reuters Messaging: leah.schnurr.thomsonreuters.com@reuters.net
1720 ET 22Dec2010
Bank shares help keep alive Wall St rally
The S&P 500 rose on Wednesday to its highest level since the collapse of Lehman Brothers, led by bank stocks that have leapfrogged other sectors in December.
The banks -- epicenter of the credit crisis two years ago -- led indexes higher as a December run helped keep the market's year-end rally afloat. The KBW Bank Index rose 1.9 percent, led by regional institutions.
Reuters Messaging: leah.schnurr.thomsonreuters.com@reuters.net
1707 ET 22Dec2010
Options risk gauge closes at lowest level since July 2007
As U.S. stocks rose modestly, volatility was down substantially. The CBOE Volatility Index, or VIX, -- a key barometer of investor anxiety -- fell 6.31 percent to 15.45, its lowest level since July, 2007. 'The market seems to believe that a year-end rally will continue through next week,' said TD Ameritrade chief derivatives strategist Joe Kinahan. But he noted there are some headwinds in 2011 such as the European debt crisis and U.S. unemployment, which has not gone away. 'So what we are seeing is that many market participants believe these and some other economic roadblocks could rear their head in the first month or two of 2011,' he said. Meanwhile, VIX December futures settled this morning at 16.01. The January futures contract is now the front month and carries a sizable premium to spot VIX as well as the longer-dated contracts.
'We saw a firm bid today in the VIX futures and very active put selling and call buying in the options on the Volatility Index,' said Dan Deming, managing director of Stutland Volatility Group. 'The action in all three are indicating that there is a fair amount of market participants who want to hedge their long portfolio risk heading into the New Year.'
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1624 ET 22Dec2010
Option player sets up likely hedge in Financial ETF
The purchase of a massive block of March 2011 put options on the Financial Select Sector SPDR fund appears to be the work of a cautiously optimistic options strategist hedging a large position in the underlying shares, said Interactive Brokers Group options analyst Caitlin Duffy. Shares in the XLF, an exchange-traded fund designed to track the performance of the Financial Select Sector of the S&P 500 Index, rose 1.07 percent to $15.98. The investor appears to have established a delta neutral hedge, buying 1.5 million XLF shares, and picking up 50,000 protective puts at the March $15 strike for a premium of 39 cents per contract on a 0.30 delta. 'It seems the trader is positioning for continued bullish movement in the price of XLF shares, but opting to shell out extra premium as well for downside protection in case the sector does not perform as expected in the first few months of 2011,' she said. The fund's options implied volatility rose 5.7 percent to 20.88 percent late in the session, she added.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1542 ET 22Dec2010
Boston Scientific option volume pops up
Boston Scientific Corp's shares fell 1.27 percent to $7.75 on news the Internal Revenue Service is seeking at least $525 million in taxes stemming from an acquisition but the medical device company plans to dispute the finding. For details, see. The stock's options volume is 6.3 times greater than typical levels with about 26,000 puts and 20,000 calls traded near the close, according to Trade Alert.
The action is focused in the February $7 puts, which traded more than 22,500 times versus open interest of 7,997.
OptionMonster's data show the sale of 20,000 February $7 puts for 22 and 20 cents apiece. The put seller apparently thinks Boston Scientific has limited downside risk, but is also willing to own the stock at $7 if it falls back to that level, said optionMonster analyst David Russell. WhatsTrading.com options strategist Frederic Ruffy noticed a block of 14,000 Feb $7 puts traded on the International Securities Exchange, which could have been an opening position that was sold, But 2,500 of those puts were bought at 22 cents on CBOE. It was tied to stock, delta neutral, according to floor source, 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.