Today’s tickers: GDX, BX & TXN
GDX – Market Vectors Gold Miners Index ETF – Trading traffic in call options on GDX is outpacing activity in puts on the ETF this morning, with shares in the Market Vectors Gold Minders Index ETF popping up 4.0% to $36.07 just before midday in New York. In contrast, the single-largest trade in GDX options established in the early going this morning protects against – or profits from – a significant pullback in the price of the underlying fund to the lowest levels since January of 2009. Shares in the ETF have declined steadily during the past six months, and are down roughly 35% since September of 2012. The sizable bearish bet, the purchase of 8,000 puts at the Dec. $30 strike for a premium of $1.32 per contract, makes money if shares in the ETF plunge 20% from the current price of $36.07 to settle below the effective breakeven point at $28.68 at expiration.
BX – Blackstone Group LP – Options changing hands on the asset management and advisory firm on Tuesday morning effectively place a floor underneath shares in Blackstone for traders positioning for the price of the underlying to retain gains realized this year. Blackstone is scheduled to report first-quarter earnings next Thursday. Shares in BX, up more than 80% since May of 2012, added 0.65% today to trade at $20.40 by 11:30 a.m. ET. The most active options contracts on Blackstone as measured by volume are the May $19 strike puts, with roughly 3,000 lots traded against open interest of 892 contracts. Time and sales data suggests most of the volume was sold at an average premium of $0.48 apiece during the first 30 minutes of the session. Put sellers keep the full amount of premium received on the transaction as long as shares in Blackstone exceed $19.00 at May expiration. The bullish strategy may start to lose money, however, in the event that shares in BX slip beneath the breakeven point on the downside at $18.52. Shares in the name last traded below $18.52 at the end of February.
TXN – Texas Instruments, Inc. – Heavy trading traffic in Texas Instruments put options today indicates some traders may be bracing for shares in the name to decline in the near term, perhaps following the company’s first-quarter earnings report on April 22nd. Shares in the Dallas, Texas-based semiconductor maker are down 0.50% on the session at $34.89 as of 12:05 p.m. ET, but have rallied more than 10% year to date. Options activity in TXN is concentrated at the May $35 strike, with more than 20,000 puts in play versus open interest of 1,225 contracts as of the time of this writing. It looks like most of the puts were purchased during morning trading at an average premium of $1.29 apiece, thus positioning buyers to profit in the event that TXN’s shares decline more than 3.0% from the current level to trade below the average breakeven point at $33.71 by May expiration.
Caitlin Duffy
Equity Options Analyst
