logo
  Join        Login             Stock Quote

Bearish Options Active On Molycorp As Shares Nosedive

 January 10, 2013 01:46 PM
 


MCP - Molycorp, Inc. – Shares in rare earth metals mining company, Molycorp, Inc., are reeling Thursday morning after the Greenwood Village, Colorado-based company missed its 2012 production target and lowered its 2013 revenue and cash estimates. The stock is currently down 24% on the day to stand at $8.20 as of 11:00 a.m. ET. Analysts at JPMorgan cut their price target on the stock to $5.00 from $8.00 today. Options traders positioning for shares to weaken further by the end of this week initiated bearish plays in weekly put contracts. Put volume is on the rise at the Jan 11 '13 $9.0, $8.5 and $8.0 striking prices this morning. Traders appear to have purchased around 1,100 in-the-money puts at the $9.0 strike, and another 2,350 lots at the $8.5 strike in the early going. The $8.0 strike puts have traded upwards of 2,200 times thus far today versus zero previously opened positions, with the bulk of the contracts purchased for an average premium of $0.13 apiece. Traders long the Jan. 11 '13 $8.0 strike puts stand ready to profit at expiration this week should Molycorp's shares decline another 4% from the current price of $8.20 to breach the average breakeven point at $7.87. MCP shares, down more than 70% since January 2012, last traded below $7.87 on November 23rd.

[Related -Linkedin Corp (NYSE:LNKD): New Marketing Efforts Should Improve Ad Sales]

IACI - InterActiveCorp – Options activity on media and Internet company, InterActiveCorp, this morning indicates one trader is preparing for shares in the name to potentially decline in the near term, perhaps following the company's fourth-quarter earnings report in February. Shares in the operator of online dating websites, match.com and okcupid, are down more than 3% today at $43.99 as of 11:15 a.m. in New York. The single-largest transaction in IACI options this morning was the purchase of 1,500-lot Feb. $40/$45 put spread for a net premium of $1.55 each. The bearish spread makes money if shares in InterActiveCorp slip 1.2% from the current level to trade below the breakeven price of $43.45. Maximum potential profits of $3.45 are available at expiration next month in the event that shares in the media company drop 9% to a new 52-week low of $40.00.

[Related -Linkedin Corp (NYSE:LNKD): A Look At Next Major Opportunities]

LNKD - LinkedIn Corp. – Shares in online professional network operator, LinkedIn Corp., are rallying Thursday after the company announced yesterday it has reached 200 million members. The milestone marks an increase of more than 13 million members since its last announcement on November 1, 2012, according to a statement on the company's website. LinkedIn shares jumped 5% to an intraday high of $119.37 at the start of the session after the stock was rated new ‘outperform' with a price target of $133.00 at CLSA. Options traders snapping up weekly call options on LNKD this morning are positioned to profit should the price of the underlying extend gains in the near term. The Jan. 11 '13 $120 strike calls are the most active of the weekly contracts with one full trading session remaining to expiration. Upwards of 2,500 $120 strike calls changed hands before midday on the East Coast, and it appears most of the contracts were purchased for an average premium of $0.49 each. Call buyers stand ready to profit at expiration this week should shares in LinkedIn rally above the average breakeven point at $120.49. Bullish positioning on the stock spread to the Jan. 18 '13 $125 strike, where roughly 400 calls were purchased for an average premium of $0.31 apiece. Traders long the $125 strike calls that expire next week may profit in the event that shares rally another 5% to surpass $125.31. Shares in the name last traded above $125.31 in mid-September 2012 when the stock reached an all-time high of $125.50 on an intraday basis.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageAmerican Apparel Inc. (APP) and International Stem Cell Corp (ISCO): Trading Under $1 with Seven Figure I

Admittedly, it was difficult to pick one of the 30 that stood out compared to the other 29. So, instead of read on...

article imageCanadian Solar Inc. (CSIQ): Going to $40 Says FBR capital

On an otherwise red day, Canadian Solar Inc. (NASDAQ:CSIQ) is bobbing higher, up nearly 1% as we type. The read on...

article imageGoogle Inc. (GOOGL): 3T Analysis – Buy The Dip on the Way to the 52-Week High

With new market highs, hot IPOs such as GoPro Inc. ripping it up, and Apple Inc. back on top, Google Inc. read on...

article imageFamily Dollar Stores, Inc. (FDO) Q3 Earnings Preview: Too Many Things Pointing the Wrong Way

Family Dollar Stores, Inc. (NYSE:FDO) will release its financial results for the third quarter of fiscal read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.