Cypress Bioscience Among Bullish Options
OptionMonster
01/02/09 - 02:13 PM EST
Cypress Bioscience
By Jon "DRJ" Najarian, cofounder of
OptionMonster.
There is a bullish options trade today on
Cypress Bioscience (CYPB Quote), which we
cited for unusual trading activity before Christmas.
An institutional player sold the January 10-7.50 put spread some 4,000 times today, according to OptionMonster's tracking systems. Now when you sell a $2.50 put spread for nearly $2, it's the equivalent of buying the same call spread (7.50 - 10) for $.50. In other words, it's a bullish trade in the stock, which is up nearly 9% to $7.44 in afternoon trading.
CYPB saw unusual trading on Dec. 23, both in options and the stock itself. Volume was heavier than normal, with more than 636,500 shares changing hands versus a daily average of about 572,000 during a slow holiday week for the rest of the market. At the same time, nearly 8,000 puts traded at the January 5 strike.
Oil Services HOLDRS
By Chris McKhann, analyst at
OptionMonster.
As crude appears to be entering the early stages of a recovery, the oil services ETF is up 7.5% and seeing call buying.
The
Oil Services HOLDRS exchange traded fund (OIH Quote) is up to $79.28 in afternoon trading as it pushes toward resistance after bouncing off recent lows. The ETF, which includes refineries and other oil service companies, hit a 52-week low of $60.96 on Dec. 5 after plummeting from a high of $228.75 back in July.
Banking on further gains, traders are buying the February 90 calls, as more than 7,000 of those have changed hands against open interest of 1,094, according to optionMONSTER's tracking systems. Those calls have risen from $1.90 to $2.90 as the OIH has pushed higher.
This trade is a bet that OIH will rise above 93 by that February expiration. The ETF last saw those levels back in early November.
The implied volatility is 63%, down from levels around 100 and at its lowest level since late September. The 30-day historical volatility remains high at 103%, but the 10-day level, at 67, is more in line.
Ciena
By Chris McKhann, analyst at
OptionMonster.
In this light-volume first session of 2009, the largest trade of the day so far is a bullish spread in
Ciena (CIEN Quote).
The communications networking company remains in an increasingly tight range, despite being up 2.5% on the day. CIEN is trading at $6.87 this morning, hovering above the low of $5.07 from late November but still roughly 80% off the 52-week high set back in April.
The trade is a spread involving the January and February 7.5 calls, with a block of 10,000 of each changing hands within seconds, according to OptionMonster's tracking systems. This could be a calendar spread but with open interest at 12,365 in January, it is likely a roll-out of a bullish position from January to February to allow more time for the trade to work.
The implied volatility of CIEN is 121%, down off its recent highs. The implied volatility of the January 7.5 calls is 83 and February is 79, giving a slight advantage to the roll-out. The stock needs to be above $8 for the trade to be profitable at expiration, but it was as high as $10 at the beginning of November.
