Bullish Options Activity in Plains Exploration (PXP) and Amgen (AMGN)

The SPDR S&P 500 Index SPY is trading 49 cents higher, up nearly half a percent to $111.60. The January at-the-money straddle has come in slightly, suggesting a pullback in implied volatility. When we went home on Friday, the January 111 straddle was priced at $5.17, or 4.66% of strike. Currently, the January 112 straddle is trading for $4.93, or 4.4% over strike.

Plains Exploration & Production Company PXP has risen 76 cents today, nearly 3%, to $27.00. While there is no specific news on this company, Exxon Mobil’s (XOM) buyout of XTO Energy Inc. (XTO) has boosted the entire oil and natural gas sector. We are seeing call buying and put selling in the February series in PXP. Specifically, more than 4,000 contracts traded on the 25-strike put and 29-strike call.

Amgen, Inc. AMGN is up 68 cents today to $56.99. Earnings are next due on January 25. Last week, the company said the Phase 3 trial of Demnosumab showed significantly reduced risk of multiple skeletal related events in patients with advanced breast cancer. On the options front, it looks as though an investor is rolling positions from the January 60 calls to the April 60 calls, as the back-month options are getting sold while the April calls are getting bought. More than 5,000 contracts so far today have traded at the April 60 strike, versus existing open interest of 7,261.