V – Visa Inc. – Shares in the electronic payments and technology company are on the rise today, gaining as much as 3.3% to hit a one-month high of $184.40 on news the company, along with Goldman Sachs Group Inc. and Nike Inc., will replace Hewlett-Packard Co., Bank of America Corp and Alcoa Inc. in the Dow Jones Industrial Average later this month. Shares in Visa are up approximately 40% since this time last year, but trade roughly 6.0% below the record high of $196.00 secured back on July 25th.
Options volume on Visa rose to more than twice the average daily level, with 24,800 contracts exchanged by 3:40 p.m. in New York. Fresh interest building in weekly calls on Visa today suggests some traders are positioning for shares in the name to extend gains during the next few sessions. The most traded weekly contracts are the Sep 13 ’13 $185 calls, with around 1,900 lots in play versus open interest of 267 contracts. Time and sales data suggests most of the $185 calls were purchased at an average premium of $1.08 apiece. Buyers of the $185 calls stand ready to profit at expiration in the event that Visa shares rally another 1.0% over today’s high of $184.19 to exceed the average breakeven point at $186.08. The Sep 13 ’13 $190 calls are also changing hands this afternoon with around 940 lots traded against open interest of 84 contracts. Most of the $190 calls appear to have been purchased at an average premium of $0.26 each.
IGT – International Game Technology – Traders appear to be snapping up front month call options on the maker of electronic gaming equipment today, with shares in International Game Technology trading up as much as 7.2% during the first half of the session to touch a new 52-week high of $20.94. Options volume on IGT is approaching 17,000 contracts just before midday in New York, roughly 18 times the stock’s average daily options volume of approximately 950 contracts.
The Sep $20 strike calls are the most actively traded as measured by volume on IGT today, with 3,200 contracts exchanged against open interest of 1,137 contracts. Time and sales data indicates most of the $20 calls were purchased this morning; traders paid $0.55 apiece for approximately 1,000 contracts, $0.75 for another 1,000 contracts and $0.90 for roughly 1,000 of the call options. Bullish positioning spread to the Sep $21 calls, with around 1,600 lots purchased for an average premium of $0.39 each. Traders also appear to have purchased around 900 of the Sep $22 strike calls for an average premium of $0.11 each, and more than 200 of the $23 strike calls at an average premium of $0.08 per contract.
ADI – Analog Devices Inc. – Options volume on chipmaker Analog Devices is up sharply today, with roughly 18,000 contracts in play on the stock versus an average daily volume of fewer than 600 contracts. Trading is heavily concentrated in the Oct $47 strike puts where upwards of 16,000 contracts have changed hands as of 11:00 a.m. ET. Time and sales data indicates the bulk of the $47 puts were purchased for an average premium of $1.15 each. The put options may be profitable at expiration next month in the event that shares in ADI decline 4.2% from the current price of $47.85 to settle below the average breakeven point at $45.85.
NFLX – Netflix Inc. – Shares in Netflix rallied to new highs on Tuesday morning, with the stock gaining 4.55% to $307.56 during the first 90 minutes of the session. Options volume is nearing 40,000 contracts as of the time of this writing, roughly 50% of the stock’s average daily volume of around 76,000 contracts. Trading in calls is outpacing that of puts, with the call/put ratio hovering near 1.4 in the early going.
