Call Sellers Take Premium in Property-Casualty Insurers Page 2
Office Depot (ODP - commentary - Cramer's Take) is one of the market's ignominious decliners, with the current $2.25 share price comparing to a 52-week high around the $20 level. Today's third-quarter earnings report revealed an unexpected loss for the company, but a 20% rally for shares suggests the market feels the punishment already meted out by Wall Street's tougher taskmasters may have been excessive, and that Office Depot's cost-cutting measures will help the company turn a corner.
An increase in option trading volume to more than 16 times the normal level, post-earnings, showed traders buying freshly into 2.50 calls in December and January, with three-fourths of the option activity in Office Depot today classified as "bullish" in nature.
An overweight of bullish activity extended to the options of another office efficiency ticker, Ikon Office Solutions (IKN - commentary - Cramer's Take). With shares up 1.1% to $17.09, bullish option traders took credits by selling downside puts, targeting the $15 strike in the November and January contracts. Implied volatility at 12.3% ticks in at half the historic volatility reading on the stock.
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At the time of publication, Darst had no positions in the stocks mentioned.
Rebecca Engmann Darst is the Portfolio Manager for TheStreet.com?s Options Alerts Portfolio newsletter and an equity options analyst for RealMoney Each Thursday at 6:30 a.m. EST, she delivers the early-morning lowdown on option volume and sector trends on CNBC's "Squawk Box."
Prior to her work in the equity options market, she spent seven years in Scandinavia as a Copenhagen-based chief reporter for a European Commission news service, correspondent for Spanish daily El Mundo and Radio Netherlands, followed by stints at Nordea Bank and Saxo Bank.
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