(By Andrew Wilkinson) Research in Motion, Ltd. (RIMM)– The
struggling mobile phone maker's shares are in the single-digits today,
down 5.75% this afternoon to $9.67, trading at their lowest level in
nearly a decade. Put buying and call selling in the weekly options
suggests there is further pain ahead for RIMM shareholders. Traders
positioning to profit from further weakness in the price of the
underlying snapped up more than 1,250 in-the-money puts at the Jun. '08
2012 $10 strike for an average premium of $0.23 each in the first half
of the session. Put buyers may profit at expiration later this week
should shares in Research in Motion settle below the breakeven price of
$9.77. Meanwhile, traders selling upside calls walk away with profits as
long as shares in the Blackberry maker fail to rally by expiration this
week. More than 6,200 calls changed hands at the $10 strike against
open interest of 648 positions, and it looks like most of the calls were
sold for an average premium of $0.06 each. Upwards of 2,100 calls were
sold at the Jun. $10 strike today at an average premium of $0.28 per
contract. Research in Motion in scheduled to report first-quarter
earnings after the closing bell on June 28th. The Company last week
forecasted an operating loss for the first quarter and said it had hired
banks to look into strategic options.
HollyFrontier Corp. (HFC) – The
Dallas, Texas-based producer of gasoline and jet fuel popped up on our
most active by options volume market scanner this morning following a
flurry of activity in the July expiry calls and puts. Shares in
HollyFrontier rallied at the start of the session after the stock was
raised to ‘Buy' from ‘Neutral' at UBS, but those gains were short-lived,
with the stock now down 3.3% to stand at $28.70 as of 1:25 p.m. in New
York. The largest trade in HFC options today appears to be a bet that
shares in HollyFrontier will settle in a narrow range by July
expiration. It looks like one strategist initiated a short strangle,
selling 7,665 puts at the July $29.5 strike and selling the same number
of calls at the July $30.5 strike, all for a net credit of $3.60 per
contract. The trader keeps the full amount of premium should shares in
HFC settle within the $29.50 to $30.50 range implied by the strikes,
with losses possible in the event that shares in the name exceed the
upper breakeven price of $34.10 or slump below the $25.90 breakeven
price on the downside.
Hansen Medical, Inc. (HNSN) – Shares
in the medical equipment maker are bucking the trend today, trading
11.3% higher on the session at $2.57 as of 12:30 p.m. ET. Options
traders appear to be picking up in-the-money calls in the front month,
perhaps to position for shares in Hansen Medical, Inc. to extend gains
in the near term. More than 1,100 calls have changed hands at the Jun.
$2.5 strike, with most of the volume purchased for an average premium of
$0.28 apiece. Call buyers may profit at expiration later this month in
the event that Hansen's shares rally another 8.2% to surpass the average
breakeven price at $2.78.