Today's tickers: GDX, CF, S, XHB, PCLN, XLF, CX, CAR, BZH, CRI & ERTS
GDX - Market Vectors Gold Miners ETF –
Shares of the gold ETF that invests in shares of precious metals mining
companies are up 0.5% to $49.53 with one hour remaining in the trading
session. Option implied volatility has come down from 54% to 46%
recently as gold's price has surged. Nearer-term investors sought
downside protection on the fund, whereas long-term traders initiated
bullish plays. Investors hoping to lock in gains experienced during the
recent run-up in the price of gold purchased 4,000 puts at the January
2010 47 strike for 3.05 apiece. Further along, at the March 2010 44
strike, another 6,000 puts were picked up for an average premium of
3.10 per contract. Finally, long-term bullishness took the form of a
call spread in the January 2011 contract. It appears one investor
purchased about 5,000 calls at the January 50 strike for an average of
9.52 each, marked against the sale of the same number of calls at the
higher January 55 strike for 7.55 each. The net cost of the optimistic
play amounts to 1.97 per contract. The trader stands to accrue maximum
potential profits of 3.03 each if shares of GDX rally 11% over the
current price to $55.00 by expiration in January 2011.
CF - CF Industries Holdings, Inc. –
Bearish option plays appeared on the manufacturer of nitrogen and
phosphate fertilizer products today after the firm rejected rival
Agrium Inc.'s increased takeover offer of $4.52 billion. Shares of CF
are currently trading 4% lower to $77.20. Investors purchased put
options at the now in-the-money December 80 strike for an average
premium of 6.70 apiece. Perhaps put-buyers are protecting long stock
positions. Otherwise, they are hoping to accrue profits if shares of CF
decline through the effective breakeven price of $73.30. Another trader
unraveled a previously established bullish play in the January 2010
contract. The investor originally placed an extremely bullish 8,500-lot
call spread at the January 90/100 strikes. However, the trader
abandoned bullish sentiment today by closing out the spread. Option
implied volatility on CF jumped 7.5% over Monday's closing value of
52.9% to reach an intraday high of 55.9%.
" title="S : Stock Quote, News and Research" class="showrtquote">S - Sprint Nextel Corp. –
Shares of the wireless communications company surrendered a portion of
gains experienced during yesterday's 20% rally to an intraday high of
$3.43. The stock rebounded due to news that Clearwire Corp. is set to
receive $1.56 billion. Sprint Nextel owns more than half of Clearwire,
and is one of a number of companies contributing cash to the Kirkland,
Washington-based firm. Sprint's shares are currently down 5.5% to $3.24
with 80 minutes remaining before the closing bell. We observed a number
of bearish transactions take place in the January 2010 contract this
afternoon. One trader initiated a bearish risk reversal. The investor
sold 5,000 calls at the January 4.0 strike for 16 cents apiece in order
to partially finance the purchase of the same number of put options at
the lower January 3.0 strike for 25 cents each. The net cost of the
transaction amounts to 9 pennies per contract. Another investor threw
in the towel on Sprint today. It appears some 25,000 calls were sold at
the January 4.0 strike for 16 cents each.
