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What's Hot!
OptionsHouse investment specialists Steve Claussen and George Ruhana give you a look at what's hot in the world of options. Get the inside scoop on which options are the hottest, and which ones are beginning to cool down.
Heavy options trading seen in Apple Inc. (AAPL) and TiVo (TIVO)
Option traders – U.S. markets are mostly green today 10 to one winners over losers as nonfarm payrolls came in higher than estimates. I’m Steve Claussen, Chief Investment Strategist for OptionsHouse, and this is What’s Hot for Friday, March 5th.
Nonfarm payrolls declined for the 25th time in 26 months, as the U.S. lost 36 thousand jobs in February. But this was better than the drop of 68 thousand expected by economists. The unemployment rate, meanwhile, held steady at 9.7 percent. This report has driven some buyers into the market, with the materials and energy sectors showing particular strength. In late-morning trading, the Dow is up 83 points, overtaking the 10,500 level, the Nasdaq is up 23 points, or one percent, and the S&P 500 has gained about 10 points. The VIX is moving sharply lower, down more than 6 percent to 17.54. This index is now within a chip-shot of a new annual low.
Today on to the OptionsHouse Hotlist!
Apple (NASDAQ: AAPL) usually sees a lot of attention from options traders, but today, the activity is especially frenzied! Within the first 90 minutes of trading, almost 200,000 option contracts traded on the tech giant. The company said earlier today that the first version of the iPad tablet computer will hit the shelves on Friday, April 3rd. Expect lots of volatility and action in the options and the shares leading up to this date over the next four weeks, as traders try to predict just how popular the iPad will be and how it will impact Apple’s bottom line. For this reason, the overwhelming majority of today’s volume has been concentrated in the March and April series.
Also on today’s Hotlist … our old friend TiVo (NASDAQ: TIVO), appears, which I wrote about earlier today over on the OptionsHouse blog. Yesterday, the stock jumped 60 percent higher after winning a 300 million dollar patent-rights case against DISH Network. The shares are continuing to climb today, up another 4 percent to a new 52-week high. Nearly 50,000 option contracts have traded in TiVo today. One notably active strike is the April 11 call, which is now deep in-the-money –two blocks of 2,500 contracts traded shortly after the open. This call option came into today’s trading session with 8,200 contracts in open interest, so perhaps these traders are selling the calls to close after the stock’s recent rally. A call buyer can lose 100 percent of the premium paid for the options but theoretically has unlimited upside if the stock rallies.
That’s What’s Hot! I’m Steve Claussen for OptionsHouse. Does anyone give Hurt Locker a chance to pull the upset at the Oscars Sunday night? Have a great weekend everyone!
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