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Citigroup (C) options volume dries up; calls active in Dell (DELL) ahead of earnings
Beth Gaston Moon is the Senior Editor for the Options News Network. Beth was a member of the research department at Schaeffer's Investment Research for more than a decade. ONN’s “Lucky 13″ is our daily listing of 13 equities with the heaviest daily option volume (based on a 20-trading-day rolling average).
Thursday’s Notable Option Activity–
Citigroup (C):
For the first time since the Lucky 13 column launched, Citigroup has fallen out of the top spot. Average daily option volume in September totaled about 732,000 in Citigroup. This number declined to 593,000 in October and, so far in November, average daily volume has retreated to 325,000.
www.ONN.tv Chief Investment Strategist Jud Pyle observed, “Similar to the declining options volume we’ve seen in AIG, I think the declining options volume in Citi is a good example of the continuing trend that the crisis mentality on Wall Street is abating … there is much less frenzy. It could also be evidence that holders of Citi have gone from being ‘fast money’ traders to longer-term investors.”
Citi closed down three cents in Thursday’s trading to $4.26, despite reports that several buyout shops might be interested in the banking name’s auto-loan business.
General Electric (GE):
GE shares followed the broader market south yesterday, shedding more than 2% to close at $15.76. Vivendi is reportedly eying an exit from NBC Universal, as it may not want a part of GE’s venture with Comcast. In options news, the March 20 put was active, seeing volume of more than 5,000 contracts trade. In mid-morning trading, a block of 4,000 contracts changed hands near the ask price at $4.78 per contract.
The January 11 put also saw about 5,000 contracts hit the tape, with a block of 4,500 trading at the bid price right out of the gate, changing hands at six cents per contract. In other options news, the December at-the-money straddle expanded slightly to $1.25 from $1.21 at Wednesday’s close.
Dell (DELL):
Ahead of last night’s earnings report, DELL saw heavy call trading at the December 16 strike, which continued through the remainder of the session.
By the close, more than 19,000 contracts had changed hands compared to open interest of just over 6,000. The large majority of this volume translated into new open interest this morning, which rose to 19,400. The December straddle was little changed on the day, suggesting this action was likely a mixture of buying and selling.
The November straddle, meanwhile, closed at 89 cents, pointing to a 5.6% move in DELL shares (higher or lower) by expiration at today’s close. In after-hours trading, DELL was down more than 6% after missing earnings estimates’ by a nickel per share. The computer company also missed revenue by $28 million, or about 2%. Ahead of the open, the stock is down 7%, meaning those who bought the November straddle yesterday could bank a quick profit, if this trend continues into the trading session.
The ONN Lucky Thirteen: The 13 stocks with the heaviest option volume during the past 20 days.
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