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Kevin Cook brings us options action in Freeport-McMoRan, Lowe’s, and Barrick Gold Corp.
Kevin Cook is an options instructor for the Options News Network. He was an institutional foreign exchange market maker and arbitrageur for nine years, where he worked with futures.
Freeport-McMoRan Copper & Gold (FCX) News: The company announced it converted 99.9% of the outstanding 5.5% convertible perpetual preferred stock to common stock. The October 60 calls are active today, with volume of nearly 6,000 contracts crossing the tape versus open interest of 3,056. The October 65/75 call spread has been active of late, with a big seller on Friday buying back some of their positions on Monday. Implied volatility has come way down on the stock.
FCX: $71.75 up $1.6700 or 2.38% volume: 2.15 million shares
Oct09 60.00 Calls: volume over 5753, trading last: $12.15 bid: $12.20 ask: $12.35 OI: 3056
Straddle: Oct09 70.00 trading $7.3750 price over strike: 10.5357%
Prev. Day Straddle: Oct09 70.00 trading $7.3000 price over strike: 10.4286%
BuyWrite: Feb10 75.00 Calls Yielding 11.05% call: $7.93
Prev. Day BuyWrite: Feb10 75.00 Calls Yielding 9.93% call: $7.13
Lowe’s Companies, Inc. (LOW) News: The home-improvement retailer reaffirmed its 2009 guidance but said its 2010 earnings would come in between $1.24 and $1.34, compared to consensus estimates of $1.34. The stock is down 2.1% today to $21.49, and option traders have been active at the October 24 call strike, trading more than 10,000 contracts at this out-of-the-money strike. These are trading between a nickel and 10 cents each, and may have been initiated by sellers.
LOW: $21.55 down $0.4005 or 1.82% volume: 2.69 million shares
Oct09 24.00 Calls: volume over 7212, trading last: $0.10 bid: $0.05 ask: $0.10 OI: 12863
Straddle: Oct09 21.00 trading $1.7000 price over strike: 8.0952%
Prev. Day Straddle: Oct09 22.50 trading $1.7000 price over strike: 7.5556%
BuyWrite: Apr10 22.00 Calls Yielding 9.51% call: $2.05
Prev. Day BuyWrite: Apr10 22.00 Calls Yielding 10.67% call: $2.30
Barrick Gold (ABX) News: Gold futures are now trading about $1,015 an ounce, and Barrick is following the yellow metal higher, up 2.16% to $37.30. Nearly 6,000 calls have changed hands on the October 39 calls today, versus open interest of more than 10,000.
ABX: $37.40 up $0.8900 or 2.44% volume: 2.67 million shares
Oct09 39.00 Calls: volume over 5695, trading last: $1.15 bid: $1.10 ask: $1.20 OI: 10407
Straddle: Oct09 37.50 trading $3.5750 price over strike: 9.5333%
Prev. Day Straddle: Oct09 36.00 trading $3.4500 price over strike: 9.5833%
BuyWrite: Apr10 38.00 Calls Yielding 12.57% call: $4.70
Prev. Day BuyWrite: Apr10 37.00 Calls Yielding 12.30% call: $4.60
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