Notable Options Volume in Paychex (PAYX), Akamai Technologies (AKAM), and ArcelorMittal (MT)

Notable Options Volume in Paychex (PAYX), Akamai Technologies (AKAM), and ArcelorMittal (MT)

June 25, 2009

Jared Levy Senior Derivatives Specialist, www.ONN.tv

Thursday’s "Sidewinders: Option Volume vs. Open Interest," shot on location at the Chicago Mercantile Exchange (CME), covers interesting option trades in Paychex, Inc. (PAYX), Akamai Technologies (AKAM), and ArcelorMittal (MT).

Paychex, Inc. (PAYX)
The shares are down 6.5% today on heavy volume the heels of an ill-received earnings report and the July 22.50 puts are seeing some action. The previously untapped strike is today home to volume of more than 6,000 contracts. This was initiated by a seller, who is selling these contracts for about 15 cents each. Implied volatility is coming in a little bit today.

Paychex News: The company reported earnings last night after the close. Fourth-quarter numbers came in at 32 cents per share, or two cents below analysts’ expectations. Revenue was down 4.5% on a year-over-year basis. The company expects fiscal year 2010 revenue to decline 1-4%. Barclays has reduced its price target on PAYX to $23 from $25.

Akamai Technologies (AKAM)
The February 2010 15 puts have seen nearly 6,500 contracts cross the tape today. These are being sold as well, for about $1.40 per contract. Put selling gives the write the right to buy the stock for $13.60 at February expiration. They might be selling volatility here or perhaps taking a bullish stance on the stock. Prior to this morning, open interest stood at exactly two contracts.

Akamai Technologies News: AKAM is slightly higher today amid rumors that the company has been selected to stream the 2010 Winter Olympics for NBC’s website. Meanwhile, the shares were downgraded to "neutral" from "buy" at Bank of America.

ArcelorMittal (MT)
The July 35 call is in focus today, with volume of nearly 5,500 at the out-of-the-money strike. Looks like this is a seller of these calls for 90 cents per contract, perhaps taking in some income and predicting that MT will not trade above 35 by July expiration.

ArcelorMittal News: The stock is flat on the day. JP Morgan is raising its 2010 earnings per share and lifting its price target for MT to $45 per share from $37.

Summary: Paychex put seller, Akamai put seller, Arcelor call seller.

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