ASTX – Astex Pharmaceuticals Inc. – Options volume on Astex Pharmaceuticals is soaring on Wednesday afternoon following a story in the Nikkei newspaper that said Otsuka Holdings Co., Ltd. has agreed to acquire Astex for JPY 90 billion. Shares in ASTX rallied as much as 40% this afternoon to a multi-year high of $9.39 and sent options volume on the name up above 23,000 contracts by 3:10 p.m. ET versus the stock’s average daily volume of around 3,600 contracts. Options volume is most heavily concentrated in the September expiry contracts. Buyers appear to be stepping in to buy both the Sep $8.0 strike call and put options, which have traded roughly 2,300 and 4,000 times each, respectively, as of the time of this writing. Substantial volume is also building in the $9.0 strike calls expiring in September and October, with volumes topping 3,400 and 2,400 contracts in each case. Shares in ASTX are currently off the highest levels of the day, up 24% at $8.29.
TPX – Tempur Sealy International Inc. – Trading traffic in options on mattress maker Tempur Sealy International suggests options players are looking for the price of the underlying to edge higher during the next couple of weeks. Shares in the name are up 4.6% right now to stand at $41.58, and earlier traded up to $42.57, the highest level since July 25th. The most traded contracts on TPX today are the Sep $43 strike calls, with more than 2,900 contracts exchanged versus open interest of 375 contracts. Time and sales data suggests most of the call options were purchased for an average premium of $0.97 each, though the bulk of the volume – close to 2,000 lots – were picked up by one market participant at a premium of $1.00 apiece. Sep $43 strike calls purchased at $1.00 per contract may be profitable at expiration if shares in Tempur Sealy rally 5.8% over the current price of $41.58 to top the breakeven point at $44.00.
F – Ford Motor Co. – Shares in Ford are moving higher, up 3.0% at $16.82 at present after the automaker reported that August U.S. retail sales rose 20%, the best monthly retail performance for Ford since 2006, according to a company press release, and a 12% increase in total sales. A large 7,500-lot Mar 2014 $18/$20 call spread that appears to have been purchased on Ford within the first 10 minutes of the opening bell for a net premium of $0.46 per contract is profitable above the effective breakeven price of $18.46, with maximum potential profits of $1.54 available at expiration next year in the event Ford shares surge 19% to $20.00. Shares in Ford last traded above $20.00 back in 2001.
ETFC – E*Trade Financial Corp – Options on online broker E*Trade are more active than usual today, with overall options volume on the stock currently up above 11,300 contracts versus average daily volume of around 2,000 contracts. Much of the trading is in ETFC calls, driving the call/put ratio on the stock up to 4.0. Shares in the name earlier rose 9.5% to $15.93, the highest level in more than two years. Upside call options purchased on ETFC this morning look for the price of the underlying to rally substantially from here during the next few months. It looks like one strategist purchased 1,000 of the Jan 2014 $17 calls at a premium of $0.82 each just before 10:00 a.m. ET. The bullish stance on E*Trade makes money at expiration next year if shares in the e-broker rally another 12% over today’s high of $15.93 to exceed the effective breakeven price of $17.82.
MWW – Monster Worldwide, Inc. – Options volume on online employment solutions provider Monster Worldwide is well above the stock’s average daily level of 845 contracts this morning, with upwards of 4,000 contracts having been traded already today. Volume is concentrated in the Oct $5.0 calls, with roughly 2,950 lots traded versus open interest of 158 contracts. Time and sales data suggests 1,791 of the calls were purchased at a premium of $0.15 each, while approximately 1,100 contracts traded at $0.20 apiece. The Dec $5.0 strike calls are also attracting fresh interest this morning, with more than 750 contracts purchased just after 10:12 a.m. ET at a premium of $0.35 each. Shares in MWW are currently up 0.90% at $4.45.
