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Put spread in Bristol-Myers Squibb, call buyers in Calpine out of the gate
Karla hosts and produces Options News and Mad About Options, and writes the Sidewinder report. Karla graduated from Colgate University, where she majored in English and Film and Media Studies. Shares of Bristol-Myers Squibb Co. (NYSE: BMY) climbed seven cents to $24.04 during the first hour of trading without any significant news from the company. An investor bought the March-June 23 bear put spread, which crossed the tape roughly 3,700 times at a premium of 84 cents. In this calendar spread, the investor bought the later-dated June puts and sold the March options.
Calpine Corp. (NYSE: CPN) shares dropped three cents to $10.91 during the first hour of trading. We saw a block of 5,000 January 2011 12.5 calls cross the tape at an ask price of $1.10. Investors bought these calls looking for longer-term upside in the stock (call buyers will make money if CPN shares close higher than $13.60 at January 2011 options expiration). Implied volatility of these calls is currenlty 37, compared to a 30-day historical volatility of 27%.
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