Options Action in Wellpoint, Eli Lilly, General Electric Out of the Gate

Wellpoint (WLP) share are up 87 cents to $56.20 this morning, as investors could still be reacting to favorable healthcare news that broke yesterday. The June 60 calls crossed the tape 8,300 times out of the gate, and this action is part of a roll in which an investor rolled a short front-month position to short the June 60 calls. The investor rolled out and up on a buy-write to maintain exposure in the stock.

Eli Lilly (LLY) held an investors’ meeting this morning, and issued in-line guidance for the next fiscal year. The company has not announced its next earnings release, but we could hear figures around the end of January. Following the meeting, the stock dropped 3.5% to $35.26 during the first hour of trading, and we saw several blocks of January 36 puts trade. More than 7,100 of these options have hit the tape, and it looks like investors bought these puts looking for more movement in the stock. The buying action has boosted implied volatility in January to around 25. The December 35 straddle is trading at $1.23, compared to yesterday’s December 37 straddle that closed at $1.08.

General Electric (GE) did not release significant news, and the shares are relatively unchanged this morning at $15.65. We saw a buyer of the March 15-12 put spread, and the investor paid 66 cents for the spread. These puts have traded 15,000 times on the day so far, as at least one investor is taking a moderately bearish stance on the company.