NetApp, Inc. (NTAP) – Options
on the supplier of enterprise storage and data management software and
hardware products and services are among the most active by volume
today. Bearish positions are accumulating in the front month, with debit
put spreads comprising the majority of overall options volume in the
name. Shares in NetApp are currently down 1.1% to stand at $39.25 as of
1:20 p.m. ET, three days ahead of the Company's third-quarter earnings
report after the close on Thursday. The stock was cut to ‘hold' from
‘buy' with a share price target of $42.00 down from $54.00 at
ThinkEquity today. It looks like one or more investors purchased the
Feb. $34/$39 put spread roughly 9,000 times for an average premium of
$1.85 per contract. Traders harnessing the strategy may be hedging long
positions in the underlying shares or, alternatively, establishing
outright bearish stances on the stock in the expectation that shares
will pullback following earnings. Profits are available on the spread if
shares in NetApp drop 5.35% to trade below the average breakeven price
of $37.15. Put-spreaders could walk away with maximum potential profits
of $3.15 per contract should NTAP's shares plunge 13.4% to settle below
$34.00 at expiration.
Live Nation Entertainment, Inc. (LYV)– Put
options on the live entertainment and eCommerce Company are more active
than usual today, with more than 10 put contracts changing hands in the
first half of the session for each single call option in play. Shares
in the operator of Ticketmaster.com are up 0.90% at $10.82 just before
12:00 p.m. in New York. Traders may be snapping up put options on Live
Nation Entertainment ahead of the Company's fourth-quarter earnings
report next Thursday after the close. The April $10 strike saw the
single largest transaction in LYV puts, with one investor buying a block
of 9,577 of the contracts for a premium of $0.70 each. The put buyer
may be taking an outright bearish stance on the stock through April
expiration or hedging a long position in the underlying shares. If
outright bearish, the investor stands prepared to profit in the event
that Live Nation's shares drop 14.0% to breach the effective breakeven
price of $9.30 by expiration. Put volume at the April $10 strike is
greater than 11,600 contracts versus open interest of just 146
positions.
Seattle Genetics, Inc. (SGEN) – Shares
in biotechnology firm, Seattle Genetics, Inc., are up 2.15% this
afternoon at $19.00 ahead of the Company's fourth-quarter earnings
report after the closing bell. The stock popped up on our ‘hot by
options volume' market scanner in the first hour of the trading session
due to heavier-than-usual activity in put options. Front month puts are
the most actively traded contracts on Seattle Genetics thus far in the
session, with the bulk of the volume changing hands at the Feb. $20
strike. It looks like one or more investors traded around 2,300
in-the-money puts at the $20 strike for an average premium of $1.60 per
contract. A substantial portion of the puts were purchased, while the
largest single trade – a block of 1,250 puts – traded to the middle of
the market. Buyers of the put options may profit at expiration if SGEN's
shares drop 3.2% to settle below $18.40. However, if the large block of
puts were sold rather than purchased by the investor, a run-up in the
price of the shares to $20.00 or above results in maximum possible
profits of $1.60 per contract on the position.