SPY - SPDR S&P 500 ETF – A
large trade in SPY call options, one that comprised more than 15% of the
630,000 options contracts that had changed hands on the ETF by 11:05
a.m. ET on Thursday morning, appear to be a massive bullish play that
looks for the S&P 500 Index to rise to fresh five-year highs next
week. Shares in the SPY, an ETF that tracks the performance of the
S&P 500 Index, are moving higher for a third consecutive session, up
0.45% at $147.71, helped by a decline in initial jobless claims, strong
housing starts and better-than-expected corporate earnings reports. The
outright purchase of 100,000 calls at the Jan. 25 '13 $150 strike at a
premium of $0.165 per contract benefits from continued gains in the
price of the underlying fund during the next six trading sessions. The
position may be profitable at expiration next week should SPY shares
tack on another 1.7% to top the effective breakeven price of $150.165,
the highest level since 2007.
INTC - Intel Corp. – Options volume
on chip maker, Intel Corp., is on pace to surpass its daily average of
approximately 155,300 contracts this morning, with overall options
volume on the stock topping 150,000 contracts as of 10:55 a.m. ET.
Upside calls on Intel are active, with shares in the name up 1.2% on the
session at $22.37, ahead of the company's fourth-quarter earnings
report set for release after the closing bell today. Call options set to
expire at the end of the trading week are seeing the most action this
morning, specifically the Jan. $23.5 strike contracts. Upwards of 48,000
calls have changed hands at the $23.5 striking price, versus previously
existing open interest of 11,801 contracts. It looks like most of the
contracts were purchased in the early going for an average premium of
$0.12 apiece. Bullish calls may be profitable at expiration should
Intel's shares surge 5.6% post-earnings to exceed the average breakeven
price of $23.62. Like-minded strategists snapped up 3,000 weekly calls
out at the Jan. 25 '13 $23.5 strike for an average premium of $0.15
each, as well.
VMED - Virgin Media, Inc. – Bearish
puts are in play on the U.K. provider of broadband Internet, television
and telephone services this morning, as shares in Virgin Media trade
0.70% lower on the session to stand at $38.43 just before midday in New
York. Fresh interest in the February expiry put options on VMED may be
the work of one or more traders securing downside protection ahead of
the company's fourth-quarter earnings report next month. The Feb. $35
strike put options are most active, with around 3,800 lots in play
against open interest of 828 contracts. It looks like most of the put
options were purchased within the first 15 minutes of the trading day
for an average premium of $0.25 each. Profits, or downside protection,
kick in if shares in Virgin Media drop nearly 10% from the current price
of $38.43 to breach the breakeven point at $34.75 by February
expiration. Shares in VMED, up nearly 60% in the past six months, last
traded below $34.75 in November 2012.