Granted these are primarily earnings reactions, but shares moving 5 to 10 standard deviations are very unusual (a statistician will tell you the chances of a 5 sigma move are about 1 in 3.5million), but earnings are earnings, and most people agree stock returns are not really normally distributed anyway. Regardless- these are big movers that indicate a significant impact of new information and often lead to trading opportunities.
A number of names have seen bullish flow this week, primarily in the form of unusually strong call buying accompanied by lifting implied volatility.
Corning Glass (GLW) saw early bullish flow on Thursday with more than 6,000 calls trading (about twice normal) and implied vol increasing a point to 20.7%. July 16 calls and May 15 calls are the most active, while the largest trade was a 412 lot of May 15 calls bought for $0.29.
Micron Tech (MU) is up $0.25 cents to $10.49, new 52-week highs, and recent trades on the memory chipmaker include a sweep of 2,610 weekly (expiring tomorrow) 10.5 calls for $0.14 when the market was $0.12 to $0.14. 3,405 traded against 1,508 in open interest and market is now $0.14 to $0.16 cents. Total options volume in MU in first 10 min was 7, 400 calls and 400 puts which is nearly 10x the typical volume for the open.
Bullish flow was noted in detected in Ocwen Financial Corp (OCN) Wednesday afternoon with 6,9100 calls trading (2x expected) and implied vol increasing over 2 points to 32.52%. Jun $40 Calls led the flow, shares up 3% Thursday morning.
Bullish trade in Occidental Petroleum (OXY) Wednesday as a buyer paid $0.96 for 10,000 May 90 calls (0.84% out-of-the-money to open a new position, as shares traded near $89.
A possible long-play into earnings (due May 21) is in Lowes Companies (LOW) with buyers of May 42 and June 43 calls to open new positions. Peer Home Depot (HD) is also due to report that week.
OptionsProfits can be followed on Twitter at twitter.com/OptionsProfits.
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
Select the service that is right for you!COMPARE ALL SERVICES
Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV