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Jud Pyle looks at Kimberly-Clark (KMB), Adobe Systems (ADBE), and Cisco Systems (CSCO).
Jud Pyle is the Chief Investment Strategist for Options News Network. After four years with SBC Warburg, he joined PEAK6 Investments as an equity options trader and chief risk officer.
Notable Option Trading On Kimberly-Clark (KMB), Adobe Systems (ADBE), and Cisco Systems (CSCO)
Monday’s "Sidewinders: Option Volume vs. Open Interest," shot on location at the Chicago Board Options Exchange (CBOE), covers interesting option trades in Kimberly-Clark Corporation (KMB), Adobe Systems Incorporated (ADBE), and Cisco Systems Inc. (CSCO) .
Kimberly-Clark Corporation (KMB)
The October 45 puts and October 55 calls are active today and seeing similar volume as someone buys these calls and sells the puts. This spread is costing the investor about 20 cents in total, and he needs the stock to move higher to profit. About 5,000 contracts have already traded on both out-of-the-money options today. The stock is down about 2% in mid-morning activity.
News: The stock was downgraded to "buy" from "neutral" at Goldman Sachs this morning, making today’s bullish options activity a bit contrarian.
Adobe Systems Incorporated (ADBE)
The June 30 put is active this expiration week, with volume of nearly 4,100 on open interest of 6,000 trading for about $1.50. The July 29 straddle is at 3.35, 11.5% of strike. Those expecting little volatility from ADBE could consider selling that straddle; those expecting ADBE to rally or plunge after tomorrow’s earnings report might consider buying it. Bulls could consider selling short-term puts.
News: Reports earnings after the close tomorrow.
Cisco Systems Inc. (CSCO)
Activity at the October 20 calls strike, with more than 12,000 contracts trading in the first hour. These calls were purchased for around $1.43 with the stock down 2.5%.
News: The company will be hosting a webcast tomorrow at 2:00 p.m. Pacific Time to discuss their consumer strategy.
Summary: Bullish Cisco call buyer; bullish Kimberly-Clark call buyer/put seller; bearish Adobe put buyer.
For more breaking news on the options market, stay tuned in to www.ONN.tv. Thanks for watching!
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