FB – Facebook, Inc. – Shares in Facebook are up 3.9% at $44.32 on Friday afternoon, following a price target increase to $55.00 from $40.00 at SunTrust Robinson Humphrey. SunTrust maintains a ‘Buy’ rating on Facebook.
Options volume on FB is marching higher, topping 475,000 contracts by 1:45 p.m. ET and surpassing the stock’s average daily options volume of approximately 402,000 contracts. Trading in FB calls is outpacing that of puts, driving the call/put ratio to 2.2 as of the time of this writing. Shares in Facebook are up more than 130% since this time last year.
PKG – Packaging Corporation of America – The manufacturer of containerboard and corrugated packing popped up on our ‘hot by options volume’ market scanner on Friday morning due to heavier than usual trading in October expiry calls. Overall options volume in excess of 2,650 contracts as of the time of this writing is more than nine times the stock’s average daily options volume of approximately 290 contracts.
The most actively traded contracts by volume on PKG today are the Oct $57.5 strike calls, with roughly 1,200 lots in play versus open interest of 467 contracts. Most of the volume appears to have been purchased just after 10:00 a.m. ET this morning for an average premium of $0.37 each. Buyers of the $57.5 calls profit at expiration next month in the event that shares in PKG surge 8.0% over the current price of $53.62 to surpass a breakeven point and new 52-week high of $57.87. Packaging Corp is expected to report third-quarter earnings in mid-October.
MAS – Masco Corporation – Trading in front month call options on the home improvement and building products company today looks for shares in Masco to extend its recent bounce off a six-month low of $18.27 reached last week. The stock is up more than 2.0% on the day to stand at $19.65.
More than 3,300 of the Sep $20 strike call options appear to have been purchased straight out of the gate this morning for an average premium of $0.48 each. The contracts make money at expiration if shares in the name tack on another 4.0% to top the average breakeven price of $20.48. Open interest in the Sep $20 calls is substantial, with 8,809 open contracts. Time and sales data indicates much of the open interest was purchased during the third full week in August for an average premium of $0.43 apiece.
Shares in Masco Corp have increased 4.0% since this time last week, but are down 14% from a five-year high of $22.83 touched back on May 20th.
YELP – Yelp! Inc. – Shares in the online source for local business reviews rallied more than 6.0% to a record high of $62.69 this morning, sparking heavier than usual volume in Yelp options. Ninety minutes into the final trading session of the week, options volume on Yelp is approaching 11,000 contracts versus the stock’s average daily options volume of around 7,500 contracts.
Notable volume is building in far out of the money call options that expire next week. Upwards of 1,000 of the Sep 13 ’13 $70 calls changed hands during the first 30 minutes of the session, with most of the contracts purchased for an average premium of $0.37 each. Buyers of the $70 weekly calls stand ready to profit at expiration should Yelp’s shares surge 12% over today’s high of $62.69 to settle above the average breakeven point at $70.37.
Shares in Yelp are up roughly 145% since this time last year. The stock was rated new ‘Overweight’ at Barclays with a price target of $64.00 a share and was initiated with a ‘Buy’ rating and $81.00 target price at Deutsche Bank today.
