STOCK NEWS US-Traders eye later term Intel call options


Real-time equity news [E U]U.S. stock market report 1452 ET 12Nov2013 Traders eye later term Intel call options ------------------------------------------------------------------------------- Some players on Intel Corp appear to be shedding near-term calls andinitiating new positions in longer-term options for upside exposure.

The stock is up 25 cents to $24.41 on Tuesday afternoon and in the optionsmarket, an investor sold 43,700 November $25 strike Intel calls at 3 cents percontract in what is probably a closing trade before expiration, options strategist Frederic Ruffy.

In the November $25 calls, volume was 47,644 contracts traded thus faragainst 67,054 lots in open interest, according to Trade Alert. Separately, butpossibly related to the activity in the November $25 strike calls, an investorbought 17,000 December $25 calls on the chipmaker for 28 cents per contract. TheDecember $25 call traded 55,330 times against 80,116 lots in open interest.

The January $25, February $24 and December $24 calls on the stock are alsoseeing interest, as some players are possibly closing out November $25 calls,but seeking to maintain upside exposure by opening positions in later terms,Ruffy said. The stock, which has seen several months of seesaw action, is at thesame levels on Tuesday as six months ago, he added.

Reuters Messaging: ET 12Nov2013 Bearish action is seen in Facebook options-------------------------------------------------------------------------------Shares in Facebook Inc rose 0.58 percent to $46.47 on Tuesday afternoon.But options activity on the stock this morning suggests some traders arepositioning for the price of the underlying shares to continue lower in the nearterm, said Interactive Brokers Group equity options analyst Caitlin Duffy in aposting on the firm's website on Tuesday. The stock is down approximately 14percent since reaching an all-time high of $54.83 on Oct. 18.

Big prints in the weekly $45 strike put options, expiring on Nov. 29, caught Duffy's attention, as more than 13,700 contracts traded thus far in thestrike versus open interest of 4,261 contracts. It appears like most of the putswere purchased near the open at a premium of 94 cents each, she said.

Owners of these $45 puts stand ready to profit at expiration in a couple ofweeks in the event that Facebook shares trade below the breakeven point at$44.06. Overall options volume on FB is relatively light, with roughly 225,000contracts in play thus far below the combined recent daily average of 577,000contracts, Trade Alert figures showed. Calls are more active than puts with thecall-to-put ratio hovering near 1.38.

Reuters Messaging: 1337 ET 12Nov2013 Calls on JetBlue fly on broad strength in the airline sector -------------------------------------------------------------------------------

Call options on JetBlue Airways Corp are flying and the stock rose 4.29percent to $8.02 on broad strength in the airline sector after the U.S. reachedan antitrust settlement on the US Airways-American Airlines case.

US Airways Group Inc and American Airlines have agreed to give up landingspots and gates at several U.S. airports to win U.S. antitrust approval fortheir proposed merger, the Department of Justice said on Tuesday. AMR Corp is the parent of bankrupt American Airlines.

In options trading, a sweep of 5,578 November $8 strike calls traded onJetBlue at Tuesday mid-morning for 20 cents and then 22 minutes later, another2,576 contracts for 24 cents, followed by another 5,000 for 30 cents, options strategist Frederic Ruffy.

In all, the November $8 strike call traded 20,811 times thus far against7,460 contracts in open interest, Trade Alert data showed. The December $7,December $8 and March $8 strike calls are active as well in JetBlue. Overallvolume on JBLU is 12 times greater than usual levels with 43,000 calls and 2,394puts traded as of 1:36 p.m. EST, according to Trade Alert.

Reuters Messaging:

1114 ET 12Nov2013 Volatility ETN VXX draws large long-term put purchase ------------------------------------------------------------------------------- A large put buyer on the iPath S&P 500 VIX Short-Term Futures exchange-tradednote appears to be speculating that the fund's shares will be pared bymore than half by early 2016.

Shares of VXX, which recently saw a reverse split, are down 21 cents to$48.31 after hitting a new intraday low of $48.14 early on Tuesday.

In the options market, one player bought 63,000 January 2016 $20 puts on theETN for $3.75 per contract, said options strategist FredericRuffy. The hefty premium purchase is probably a play on the longer-termdowntrend in shares, which are affected by changes in S&P 500 implied volatilityand backwardation/contango in the VIX futures market, he added.

The ETN is based on the two front-month VIX futures, which typically carry apremium to the CBOE Volatility Index or VIX.

Reuters Messaging:

1036 ET 12Nov2013 Strategists highlight key options trades this week ------------------------------------------------------------------------------- Option order flow was muted on Monday, but there was interest to roll outprotection from November to year-end in the emerging markets space, strategistssaid on Tuesday. About 640,000 puts traded in the iShares MSCI Emerging MarketFund on Monday versus 156,000 calls, according to Trade Alert. Shares ofthe exchange-traded fund closed at $40.95. One hefty put spread drove the highervolumes, as an investor was apparently selling 210,950 November $42.50 strikeputs on the EEM for $1.60 and buying 250,000 December $41.5 puts for $1.55 percontract, said options strategist Frederic Ruffy.

Looking at open interest and trade history, the activity in the November$42.50 puts appears to be closing a position initiated a few weeks ago when EEMwas trading around $42.55. A new position was opened in the December $41.5 puts.The position adjustment appears to be expressing concerns about additionallosses for emerging markets over the next six weeks, Ruffy said. "These sorts offlows typically result in a steeping of EEM skew as put buyers overmatch thosein demand for calls," Credit Suisse derivative strategists said in a report onTuesday. Of note was another print for the ETF on Monday where an investor betagainst EEM skew by selling 30,000 December $38 puts to buy 30,000 December $44calls and collecting 20 cents for the package, CS said.

In equity options, Microsoft Corp continues to attract heavy callvolume as investors digest expected management changes, said Dan Nathan,co-founder and editor of in a report late on Monday. A traderon Monday appeared to be taking profits by selling the January $33-$36 callspread, 20,000 times at $2.50 to close a position. In addition, he said thereappeared to be a trader rolling up and out a bullish bet by selling 7,100November $35 strike calls at $2.56 to close a position and bought February $40strike calls for 74 cents to initiate a new position.

Chinese Internet company SINA Corp reports earnings after themarket's close on Tuesday and the options market is implying about a 10 percentmove for shares, up or down, Nathan said. The shares have realized an averagemove of about 6 percent over the past four quarters. With the stock down 15percent in the last few weeks since making new two-year highs in mid October, atrader closed a bullish bet by selling the December $90-$110 call spread at$1.12, he said. Nathan noted that is appears like an odd sale considering it isa $20 wide call spread with an upcoming event and over a month to expiration ina stock that has the potential to make large moves with or without news.

Facebook stock on Monday logged its third straight close below its50-day moving average and is approaching key near term technical support at $45,Nathan said. A trader on Monday closed a now seemingly ambitious bullish bet byselling 12,500 December $60 calls at 19 cents, he added. Call activityoutweighed puts in the stock on Monday by nearly two to one with a total of287,000 calls to 150,000 puts, Trade Alert figures showed. The most active linewas the December $50 calls with almost 25,000 contracts traded, Nathan said.

Reuters Messaging:

0913 ET 12Nov2013 Total option open interest increases by 3.49 mln contracts ------------------------------------------------------------------------------- A total of 12.6 million contracts changed hands in the U.S.-listed optionsmarket on Monday, resulting in net open interest growth of 1.74 million callsand 1.75 million puts, according to Trade Alert.

Alpha Natural Resources Inc, Bank of America Corp, CiscoSystems Inc and Facebook Inc attracted the greatest increase inoption open positions, data from Trade Alert showed.

The top five new positions opened include 32,000 Alpha Natural January 2014$6 strike puts, 30,000 Alpha Natural January $11 strike calls, 25,000 LibertyGlobal Plc January $90 strike calls, 25,000 Alpha Natural January $9strike calls and 24,000 Williams Companies Inc January $37 strike calls,Trade Alert said.

Reuters Messaging:

0721 ET 12Nov2013-Economic and earnings diary for Nov. 12-----------------------------------------------------------------------------Economic data on Tuesday includes the Chicago Fed National Activity Index, whichedged up in September. The Conference Board's employment trend index for Octoberis also due for release.

News Corp is the only S&P 500 still expected to report earnings onTuesday. D.R. Horton Inc and NRG Energy Inc posted resultsearlier in the day.

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