OptionsHouse Roundup: A Broad Market Rally and Heavy Options Activity in Ford (F) and Research in Motion (RIMM)
No April fool’s day pranks here as the broad market marches on higher. This rally is broad even when you look inside the indices; four stocks are up for every one that is down.
All the major market indices rallied higher today after jobless claims fell 6,000 in the week ended March 27 to 439,000 (seasonally adjusted). This lower number was a positive surprise to traders looking for a recovery in the labor markets since the prevailing consensus prior to the announcement was a prediction of 443,000.
The non-farm payroll data will be out tomorrow and will be closely watched, even on Good Friday. Markets will be closed in observance of the holiday, but we will be covering the event in our blog.
Ford (F)
Ford (F) revealed some strong overseas sales numbers in China and India, while GM (MTLQQ) reported strong sales domestically. We did see some heavy options activity in Ford this morning in a couple strikes:
F: $12.83 up $0.2600 or 2.07% volume: 79.46 million shares
Apr10 13.00 Calls: volume over 11193, versus open interest of 76446
Jun10 9.00 Puts: volume over 10930, versus open interest of 17963
Research in Motion (RIMM) was also topping the tape with a mixed, although mostly positive, earnings report. However, the company missed its earnings per share, coming in .01 below analysts’ expectations and sending the stock lower 5% towards the $70.00 level. Options traders were jockeying positions in this issue as well with volume at a relatively high level in the options and stock markets. We saw heavy action in the following strikes, but have not received detail on whether they were bought or sold.
Research in Motion (RIMM)
RIMM: $70.24 down $3.7300 or 5.04% volume: 23.11 million shares
Apr10 70.00 Calls: volume over 13762, trading last: $1.87 bid: $1.86 ask: $1.88 OI: 13896
May10 75.00 Calls: volume over 10035, trading last: $1.53 bid: $1.52 ask: $1.54 OI: 10975
In summary, there is much more data on the near-term horizon, not to mention the start of a new quarter and earnings’ season. This season will be closely watched as many would like to see the trailing p/e of the SPX, currently hovering near 19, drop down to a more normal level of 14-17. For most retail traders, the key will be staying on top of your portfolio as volatility may begin to pick up.
Remember there are a couple hours left in the trading day and the volume of these issues may continue to rise, but this is where we are seeing some heavy options activity today. Also remember that options can be bought or sold and volume does not indicate which.
These are a few of my team’s observations this morning. If you have others you would like to add to this list, please feel free to share them in the comments.
Photo Credit: wallyg
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