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Jud Pyle discusses Research In Motion Ltd. (RIMM) and Pan American Silver Corp. (PAAS).
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.
Unusual Option Selling on Research in Motion Limited (RIMM) and Pan American Silver Corporation (PAAS)
July 2, 2009
Jud Pyle, CFA Chief Investment Strategist, www.ONN.tv
The final edition of Thursday’s pre-holiday-weekend "Sidewinders: Option Volume vs. Open Interest" series, shot on location at the Chicago Board Options Exchange (CBOE), looks at the early option activity in Research in Motion Limited (RIMM) and Pan American Silver Corporation (PAAS).
Research in Motion Limited (RIMM)
Option traders are looking out to the December 90 call strike today, trading more than 3,000 options today. These are being sold for $3.85 per contract after closing last night at $3.80. This could be a bear thinking RIMM won’t move to the 90 level by December or it could be a bull executing a buy-write strategy.
Implied volatility is moving slightly higher; the July 70 straddle is at $5.08, 7.3% of strike. At last night’s close, it was at $4.85, or 6.9% of strike. The shares are up about half a percent in morning trading, easily outperforming the broader market.
Research in Motion News: The company should have the new Tour launching this year, but concerns about job losses and subsequent demand for BlackBerry devices continues to be the biggest issue with RIMM.
Pan American Silver Corporation (PAAS)
This silver mining company has its largest presence in Peru. Earnings are estimated for August 13. Speaking of August, the 17.50 puts are active today, with volume of nearly 3,100 on open interest of 251. These are being sold, crossing the tape at $1.15, the ask price.
Pan American Silver News: Nothing of note.
For more breaking developments in the options market, stay tuned in to www.ONN.tv. Thanks for watching!