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October 19, 2009 8:42 EDT Related Symbols: LLY
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OptionsNews
An ahead-of-the-bell look at the market's biggest stories and a review of unusual options activity. Filled with smart market analysis from the ONN.tv team, "Options News" turns the market's top headlines into trading intelligence, hosted by Karla Yeh.
An investor banks on a slight drop in shares to remain profitable in Eli Lilly in the near-term.
On today’s Options News, Carrie Long and the ONN.tv team look at Monday’s pre-market price action in the broader market, highlighted by a spike in futures ahead of today’s earnings.
At the close Thursday, the Dow dropped 67 points to 9,995. The S&P 500 dropped 16 points to 1,087. Implied volatility declined despite the won-market day to 21.5, suggesting that investors could see risk abating in the markets, at least for now.
Early Market Indications
Ahead of the U.S. market open, S&P 500 futures are up seven points to 1,089. International markets are up, with Hong Kong up 1.3%% and Europe up 0.7%.
Put Selling in Eli Lilly
Eli Lilly (LLY) is due to announce earnings figures this Wednesday before the market opens, and at least one investor is banking on limited downside throughout the next few months. The investor sold the January 33 puts 7,500 times versus open interest of 248 contracts. We should see volatility come in during November following this put sale, as the November 34 straddle slid more than the stock price. LLY shares dropped six cents to $34.44 to close out the week.
ONN.tv continues its Wednesday webinar series this week, as Kevin Cook and Jared Levy teach you how to become an expert on double diagonals. Time decay and underlying equity moves gain the spotlight this week, and sign up by clicking on the webinars tab at www.onn.tv to reserve your seat. Sign up now – spots fill up quickly!
For more breaking news and investment pointers on the options market, stay tuned in to ONN.tv.
