Sep 16, 2011
Option Block 90: The Voice of Options
TRADING BLOCK: Research in Motion (RIMM) - The future looks bleak. “The Widowmaker” strikes again - Netflix (NFLX), which was trading $300 just two months ago, down 40%. Yet another “rogue trader” on the loose - this time it costs UBS $2 billion. Commodities rundown - gold is coming down, is this the right time tighten up your hedges?
ODD BLOCK: Unusual and interesting options activity in: UBS AG (UBS) - a staggering $2 billion lost in trading as a rogue trader racked up unauthorized dealings. Call buying and put selling on the stock appear to be the most employed strategies of the day, with investors expecting shares to recover in the next five weeks. Amerigroup Corp. (AGP) - ahead of the company’s analyst meeting in New York tomorrow morning, an opening buyer appeared in the September 45 Calls, paying the offers of $0.25-$0.35 for approximately 3500 contracts. These options expire tomorrow after the close so these trades will need the stock to climb another 4.6% to begin to see any profits.
XPRESS BLOCK: Tim Navabi takes the reins and discusses the hectic day today at OX due to "The Widowmaker" aka Netflix, as well as the upcoming expiration of September futures.
STRATEGY BLOCK: Mike Tosaw illuminates us on some in-depth options strategy. First, with the upcoming expiration, if you're not ready to hold a stock and you're short a put, maybe you'll want to close out those penny options. Second, make sure you know position delta before doing ratio spreads.
AROUND THE BLOCK: An update on RIMM. Still some concern over Greece, also some concern about expiration upcoming. Not too much else lighting up the tape on the earnings front though. Play it safe this weekend.