(By Andrew Wilkinson) Yahoo!, Inc. (YHOO)– Shares in
Yahoo!, Inc. are up better than 5.0% this morning, though not on the
back of Facebook's highly anticipated IPO. YHOO's shares rose as much as
6.3% to $15.87, the highest since Valentine's Day, on reports the
company is in talks to potentially sell its stake in Chinese Internet
Company, Alibaba Group Holding Ltd., for an estimated $7 billion.
Options traders positioning for shares to continue to rise are targeting
weekly call options, perhaps on speculation a deal could be announced
as early as next week. Call buyers snapped up more than 3,100 lots at
the May 25 '12 $16 strike for an average premium of $0.21 apiece and
another 420 contracts at the higher $17 strike at an average premium of
$0.07 each. Traders long the $16 and $17 weeklies may profit at
expiration next Friday if shares in YHOO rally another 2.1% and 7.6% to
top average breakeven prices of $16.21 and $17.07, respectively. Bullish
action spread to the June expiry calls as well, with more than 8,000 of
the $16 strike contracts purchased for an average premium of $0.52
each. The value of the call options could certainly lose their value,
however, should talks fizzle out and shares surrender the day's gains.
Motorola Solutions, Inc. (MSI) – No
sign of May flowers for investors in Motorola Solutions, Inc., with
shares in the provider of data communications and telecommunications
equipment down roughly 9.0% since the start of the month. A burst of put
buying on MSI this morning suggests some traders expect the price of
the underlying shares to continue to slide in the near term. Shares in
Motorola Solutions are currently down 0.85% at $47.47 as of 12:00 p.m.
in New York. Put buyers looked to the June $47 strike, picking up around
1,200 lots at an average premium of $1.41 apiece, and more than 3,200
put options at the lower June $46 strike at an average premium of $0.93
each. Traders long the $47 strike put start making money should MSI's
shares decline another 4.0% to breach the average breakeven point at
$45.59, while $46 strike put options are profitable given a 5.1% bearish
move in the share price to $45.07. Executives at Motorola Solutions are
scheduled to speak at the Barclays Global Technology, Media and
Telecommunications Conference next Wednesday and the Sanford C.
Bernstein Strategic Decisions Conference on June 1st.
AstraZeneca PLC (AZN) – Put buying
on the maker of Crestor and other brand name pharmaceuticals this
morning suggests shares in the name, which currently trade 0.60% lower
on the session at $41.41, may have further to fall in the next four
weeks. AstraZeneca popped up on our scanners today after roughly 1,000
puts were purchased at the Jun. $40 strike for a premium of $0.46 each.
The trader or traders snapping up the contracts are prepared to profit
at June expiration should the price of the drug maker's shares decline
another 4.5% to settle below the breakeven point at $39.54.