So far this Monday, it looks like Donaldson Lufkin & Jenrette (DLJ Quote - Cramer on DLJ - Stock Picks) is doing what A.G. Edwards (AGE Quote - Cramer on AGE - Stock Picks) did last Monday.
| Volatility Index |
| Close Today | % Change |
| 20.35 | -3.96 |
| Source: ILX |
Last Monday, A.G. Edwards, the St. Louis-based brokerage firm, sold off after soaring late in the previous week on takeover speculation. Late last week it was DLJ's turn in the serious speculation mill, as options volume and the stock itself soared. However, on Monday, with no news on DLJ, the stock was giving back some of its sharp advance, tumbling 2 9/16 to 58 7/16.
| Put/Call Ratio |
| Close Today | Previous Close |
| 0.42 | 0.49 |
| Source: ILX |
Chatter about brokerage industry takeovers has picked up dramatically since
UBS (UBS Quote - Cramer on UBS - Stock Picks) announced
last month it was buying
PaineWebber (PWJ Quote - Cramer on PWJ - Stock Picks) for a hefty premium.
Optionswise, one of the most active option contracts on DLJ was the October 60 put on the
Philadelphia Stock Exchange, where 114 contracts traded, down a whopping 11 1/8 ($1,125) to 6 1/4 ($625). The trading there could be investors selling the puts, betting that by expiration in October, DLJ will be trading above 60 and the put options will expire worthless and the investor will keep the money received for selling the option. Also seeing interest were the August 60 calls, which were down 2 ($200) to 1 1/8 ($112.50) on the PHLX on volume of 140 contracts.
DLJ options saw significant action
Friday amid a nice run-up in the stock's price. A.G. Edwards also rallied Friday. A.G. Edwards was down 1/2 to 53 11/16.
Meanwhile,
TheStreet.com reported Friday that the
Salomon Smith Barney unit of
Citigroup (C Quote - Cramer on C - Stock Picks) is informally pondering buying a smaller securities firm to boost its roughly 12,000-broker sales force, citing two people close to the firm.
That would make several regional brokerage firms as potential takeover targets, especially the oft-mentioned
Legg Mason (LM Quote - Cramer on LM - Stock Picks) and A.G. Edwards.
On Monday there was some nibbling in Legg Mason in the in-the-money September 50 calls, where almost 80 contracts have traded to mark the first trading of any kind at that strike price. The September 50 calls were up 1/4 to 5 1/8.
Options contracts on the
CBOE Mini-NDX began trading Monday at the
Chicago Board Options Exchange as the Mini-NDX, whose ticker symbol is MNX, and got a healthy amount of interest from the trading community.
The MNX, which is 1/10th the size of the CBOE's existing
Nasdaq 100 Index options contract, was off fractionally to 364.16.
The busiest options were the out of the money September 420 calls, which saw 3650 contracts change hands. The calls were trading at 3 1/2 ($350). The out-the-money September 320 puts, which saw volume of 2350 and traded for 5 1/2 ($550).
Brian Louis
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