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1336 ET 23June2009 Traders flock to Yahoo call options
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Yahoo Inc (YHOO.O) shares were mostly unchanged at $14.71 in afternoon
trade after the Internet company said on Friday it would incur $22 million to
$27 million in restructuring charges in the current quarter to account for
previously announced layoffs of 5 percent of its staff. Investors hoping for a
recovery in the share price through August expiration looked to the August $15
strike price to purchase about 22,000 calls for an average premium of $1.10 per
contract, said Andrew Wilkinson, senior market analyst at Interactive Brokers
Group in a note to clients. Over the next few months investors long the calls
will be looking for Yahoo's shares to rally higher by 11 percent to surpass the
break even point at $16.10, he said. In all, about 40,000 calls and 11,000 puts
traded in Yahoo with sentiment based on order flow 66 percent bullish,
according to Trade Alert.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1257 ET 23June2009-Volatility looms as traders circle VIX July 42.5 calls
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The CBOE Volatility Index .VIX fell 1.51 percent to 30.70 as the
underlying S&P 500 index .SPX traded in a relatively narrow 10-point range in
the afternoon session. The SPX edged up to 894.57. In the options market,
traders appear to be bracing for increased volatility levels as the July 42.5
call option becomes the busiest contract with nearly 87,000 contracts crossing
the tape, according to Reuters data.
A lot of that volume is due to ratio spread trading, where a strategist
apparently bought 4 July 42.5 calls for every 1 (short) July 32.5 call, said
WhatsTrading.com option strategist Frederic Ruffy. More than 25,500 July 32.5
calls have also traded. The position fetched $1 per 1x4, according to a contact
on the floor and is tied to VIX futures at 32.6, Ruffy said, adding that it
might be a roll of long calls. In all, about 152,000 VIX calls traded, more
than five times the number of VIX puts, Trade Alert data showed.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1208 ET 23June2009-American Express gets bearish put fly trade
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American Express (AXP.N) fell 14 cents to $23.09 after hitting a low of
$22.41, its lowest since April 24. In the options market, sentiment was
cautious as about 51,000 puts and 12,000 calls traded near midday, a ratio of
4.44-to-1, according to Trade Alert. The volume included a substantial August
$17.50-$20-$22 butterfly put spread, bought 5,000 times for 15 cents on the
CBOE, said WhatsTrading.com option strategist Frederic Ruffy. It looked like a
new position and an opening trade, he added. This trade would take its maximum
profit if American Express shares fall to $20 by August expiration, said Chris
McKhann, analyst at optionMonster.com.
"Essentially traders appear to be betting that American Express will close
the chart gap opened after it reported earnings in April and break below its
200-day moving average of $21.86," McKhann said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1155 ET 23June2009-Actuant slides on stock offer
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Actuant Corp (ATU.N) shares tumbled on Tuesday after the diversified
manufacturer said it commenced a public offering of 9 million shares of its
Class A common stock. [ID:nBNG62648]
The company said it plans to use the proceeds to reduce debt and for
general corporate purposes.
Actuant shares plunged nearly 13 percent to $12.67.
On Thursday, the stock rose more than 11 percent after the company posted
third-quarter profit that topped Wall Street expectations. [ID:nBNG77062]
Reuters Messaging: Charles.mikolajczak.reuters.com@reuters.net
1132 ET 23June2009-Apple butterfly put spread suggests more downside
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Apple Inc (AAPL.O) shares fell 2.53 percent to $133.89 in late morning
trade. Chief Executive Steve Jobs was seen at the company's headquarters on
Monday by a Reuters reporter, underscoring speculation that he may have
returned to work from medical leave. With shares under pressure, a strategist
appears to be looking for additional downside before the July expiration,
according to WhatsTrading.com option strategist Frederic Ruffy. The AAPL July
$100-$110-$120 butterfly put spread traded 10,000 times for a net 64 cents.
Maximum profit on the trade would be $9.36 if shares fall all the way down to
$110 or about 17.5 percent from the current share price by July expiration,
Ruffy said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1121 ET 23June2009-Cytec slumps after outlook cut
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Cytec Industries Inc (CYT.N) shares slumped on Tuesday after the company
cut its full-year earnings outlook, citing a demand slowdown in its engineered
materials segment and continuing weak demand in the coatings resins segment.
[ID:nBNG482759]
The specialty chemical maker lowered its 2009 adjusted earnings per share
view to 60 cents to 90 cents per share from its prior outlook for $1.35 to
$1.74 per share.
The average estimate of analysts surveyed by Thomson Reuters is $1.26 per
share.
Cytec shares tumbled 11 percent to $16.11. Rivals HB Fuller Co (FUL.N) shed
1.6 percent to $16.50 while Hexcel Corp (HXL.N) dropped 9.7 percent to $8.90.
Reuters Messaging: Charles.mikolajczak.reuters.com@reuters.net
1111 ET 23June2009-Bernstein upgrades ConocoPhillips to outperform
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Sanford C. Bernstein on Tuesday upgraded ConocoPhillips (COP.N) to
"outperform" from "market perform," writing that the oil company's exploration
activity and potential restructuring were likely to improve valuation.
The company is showing incremental signs of increasing its higher risk,
higher reward wildcat exploration activity, and plans to spend 45 percent of
its 2009 exploration budget on wildcats, the brokerage wrote, adding that, "In
terms of near-term catalysts, we believe that the second quarter of 2009 should
also be a much stronger quarter for ConocoPhillips, and we are anticipating
that the company will have to make a positive true-up for its Lukoil (LKOH.MM)
investment."
For details, see [ID:nBNG64188]
ConocoPhillips' stock rose 1.3 percent to $40.97.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1111 ET 23June2009-U.S. stocks fall as Boeing, housing data weigh
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Major U.S. stock indexes fell on Tuesday, slipping after Boeing Co (BA.N)
again delayed the first test flight of its Dreamliner aircraft and after
housing data pointed to a sluggish economic recovery.
For details, see [ID:nN233372]
The Dow Jones industrial average .DJI fell 0.4 percent to 8,305.83 while
the S&P 500 .SPX slipped 0.2 percent to 891.25 and the Nasdaq .IXIC was off
0.5 percent at 1,758.27.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1100 ET 23June2009-Texas Instruments draws likely premium sellers
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Texas Instruments (TXN.N) shares fell 1.8 percent to $20.60 in late morning
trade and the TXN October $20 put strike is one of the busiest equity options
contracts on Tuesday morning as 21,990 contracts crossed the tape, according to
Reuters data. One top trade was 395 contracts on the bid-side for a premium of
$1.63 on the CBOE. It looks like premium sellers are driving the flow in the
October $20s and $19 put strikes, where another 11,500 lots traded earlier,
said WhatsTrading.com option strategist Frederic Ruffy. The October $19 put
contract volume increased to 23,825, Reuters data showed. The earlier action is
possibly closing, as significant open interest exists in both contracts, Ruffy
said. But he noted the stock's option implied volatility has moved up to 40
percent, from about 38.5 percent on Monday and recent trades include a sweep of
1,078 October $19 put strikes at the offer for $1.22. TI makes chips for
everything from cellphones to industrial equipment.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1052 ET 23June2009-Acura shares tumble after Acurox news
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