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1612 09June2009 Some option bears take a ride on BNSF
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Shares of Burlington Northern Santa Fe Corp (BNI.N) dipped 57 cents to
$76.32 amid a downgrade to "neutral" from "buy" by Goldman Sachs. But Goldman
also raised its price target on the U.S. railroad company by about 16 percent.
Option traders took mainly bearish stances on the stock through January 2010
expiration, said Andrew Wilkinson, market analyst at Interactive Brokers Group,
in a note. Some 2,100 puts were earlier scooped up at the January $75 strike
for a premium of $9.44 apiece. Across the tracks on the call side, about 8,300
calls were sold short at the January $80 strike for $7.50 per contract. The
investor may be taking either a long-term bullish or bearish stance on BNSF by
selling the calls. If it was a bearish trade, the trader is hoping the options
remain out-of-the-money by expiration and the share price to be below $80 to
retain the premium. If it was bullish, then the investor probably owns shares
and engaged in covered call selling.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1553 ET 09June2009 Buy S&P 500 ETF puts ahead of Treasury
auctions-analysts
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June put options in the S&P 500 ETF (SPY.P) look attractive to capture
low-priced equity volatility ahead of the Treasury auction results this week,
said derivative strategists at Jefferies & Co in a note. The Treasury's $35
billion sale of three-year notes went well, the note said. The auction was the
first installment of a total of $65 billion worth of coupon securities set to
come to market this week, with $19 billion in 10-year notes for sale on
Wednesday and $11 billion in 30-year bonds on Thursday. "As investors shy away
from the longer dated maturities, we think there is risk that the 10-year and
30-year auctions do not perform as well as the three-year," they said. SPY put
options look attractive given the risk of poor auction results, the negative
impact it could have on equity markets, and the relative discount of equity
volatility, the note said.
(Reporting by Doris Frankel)
