EX Options Draw Traders' Attention
by Houghton and Atkeson 04/22/09The May 22.50 line (EX) is busy at RHT, ANR and AKAM.
Alpha Natural Resources (ANR) is up 90 cents (+5%) to $18.10. The ANR May 22.50 Calls (ANREX) have traded 8,934 contracts, five times the usual daily volume. The call volume of 17,000 is nearly 90% of the 18,914 call open interest. Earnings are scheduled for May 6.
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Akamai (AKAM) is up 85 cents (+4%) to $20.75. The AKAM May 22.50 Calls (UMUEX) have traded 5,493 contracts and the AKAM May 24 Calls (UMUEZ) 3,951 contracts, four times usual volume -- 30% of open interest and 50% of call open interest. Earnings are scheduled for April 29.
Red Hat (RHT) is up 84 cents (+4.84%) to $18.41. The RHT May 22.50 Calls (RHTEX) have traded 6,688 contracts -- the RHT May 20 Calls (RHTED) have traded 14,000 times. RHT is being speculated as a takeover candidate.
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Looking into June, the market should begin refocusing on upcoming earnings reports for evidence the economy is gaining momentum.
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In the short-term, the government's bond auction is likely to be a key driver of stocks.
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The credit market, a reliable indicator of equity direction, suggests we will break out of the SPX's trading range to the upside.
The market seems to be saying that a 30% move up from the lows is ahead of the real economy and the market needs to allow the economy to catch up.
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