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Jud Pyle looks at BJ Services (BJS), Helix Energy Solutions (HLX), and Nike (NKE).
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 Options Volume in BJ Services (BJS), Helix Energy Solutions (HLX), and Nike (NKE)
June 26, 2009
Jud Pyle, CFA Chief Investment Strategist, www.ONN.tv
Friday’s "Sidewinders: Option Volume vs. Open Interest," shot on location at the Chicago Board Options Exchange (CBOE), covers interesting option trades in BJ Services Company (BJS), Helix Energy Solutions Group Inc. (HLX), and Nike, Inc. (NKE).
BJ Services Company (BJS)
Oil-services company BJS is down slightly today but August 12.50 puts are active, trading more than 5,000 contracts in the first hour of the session. These traded around 90 cents per contract and it looks like they were initiated by a seller. Prior to today, open interest at this back-month strike was just 241. Earnings are due on July 21; this trader may be predicting that BJS will not be very volatile around its earnings report.
BJ Services News: Stifel Nicolaus issued a report post-management meeting and came away with the following comments from the company: consolidation is likely, BJS will "pay up" for what it doesn’t have but needs. BJS would likely use equity for transactions as appropriate.
Helix Energy Solutions Group Inc. (HLX)
January 2010 10 puts are seeing more than 4,000 contracts change hands on open interest of 545. They traded for about $2.35; last night, they closed at $2.38. The stock has jumped nearly 5% in early trading. Looks like someone could be buying protection.
Helix Energy News: A Form-4 was released yesterday afternoon, showing that Helix Chairman and CEO Owen Kratz purchased about 100,000 shares of HLX, worth more than $1 million.
Nike, Inc. (NKE)
Active today is the July 50 call, where almost 7,500 contracts crossed the tape in the first hour of trading. About 6,000 July 50 puts have traded as well. Someone is betting on a range here; the calls traded around $2.30 after closing at $2.45 last night. This call is in-the-money with the stock down fractionally in early trading Friday. The calls are down much more than the stock, suggesting implied volatility is coming in. The July 50 straddle is trading at $3.40, at last night’s close the straddle was at $3.62.
Nike News: Argus downgraded NKE to "hold" from "buy" after the company gave a more conservative guidance for fiscal year 2010 than anticipated. The firm notes they are concerned it will be difficult for NKE to make similar cost reductions going forward. In the near term, the firm sees challenges that are likely to limit sales and earnings growth and believes the shares may move in line with the market over the next few months.
Summary: Investors are betting on a NKE range, buying puts in HLX, and selling puts in BJS.
For more breaking developments in the options market, stay tuned in to www.ONN.tv. Thanks for watching!
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