Coinstar (CSTR), which also owns Redbox DVD kiosks, pre earnings flow is very strong and bullish in direction. It is led by the February 57.5-62.5 call spread, bought 4500x for $1.10. A look at the earnings snapshot shows the current straddle is pricing in a 13% move, well above the historical range for this stock, and this flow points to a clear upside expectation from the buyer.
National Oilwell Varco (NOV) is up a bit this morning, near $66.92 and a 9400-lot of May 85 calls is bought on the oil driller for $0.23 per contract. 11,180 now traded against 590 in open interest. 1,876 May 75 calls also changed hands. NOV saw interest in its May calls Tuesday as well (see 2/5 color). The largest open interest positions are the May 65 puts, May 77.5 calls, May 80 calls, May 70 calls and May 62.5 puts. Now, the focus is on the May 85s. The company reported earnings last Friday and there was a negative reaction to the news. Prior to today, the stock suffered a four day 10.2% losing skid. The company will report again in late April, inside the May expiration.
Merck (MRK) saw some longer-term plays as a large early block of calls traded and the buyer paid $0.98 for 10000 January 2015 50 calls (21% otm) to open a new position. The all time high in MRK was above $60 back in November 2000.
Caesar's (CZR) saw an early burst of call buying a few minutes into the day when a buyer paid $0.25 for 414 March 10 calls as shares traded near $8.39. Another 543 traded for $0.30 a bit later. CZR is a thin name with ADV below 100, and with total open interest near 5000 contracts, today's 1680 calls is notable.
In Southwestern Energy (SWN) a buyer paid up to $1.27 for a total of 5000 March 35 calls. They look like they are closing a position opened on 1/2 for $0.97 when shares were near $32.68, about $0.50 below current levels.
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