Expirations Day Fails to Provoke Commotion in the Options Pits

Mostly neutral signals on an April Friday.
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To opt or not to opt? That is the question raised by this Friday's April expiration.

Friday marks the expiration of April

S&P 100

index options and options on individual stocks. So today is a day of gamesmanship, of deciding whether to ride the turbulent options markets to the last minute before selling; to let the options expire worthless; or to roll them over to the next month or further out on the options calendar.

At midday, the options weren't showing much expectation of a closing rally, as OEX puts appreciated in price while the calls stumbled. The OEX was down 4 to 665.6. At-the-month April 665 calls were down 3 1/4 ($325) to 3 3/4 ($375) on volume of 4,547 contracts, compared with open interest of 6,470.

But April 665 put activity beat that out, with the price up 5/16 ($31.25) to 2 9/16 ($256.25) on volume of 6,974 contracts, vs. open interest of 8,055.

Slightly out-of-the money calls also saw some action, though not as heavy: April 675 calls dropped 15/16 (or $93.75 per contract) to 5/16 on volume of 3,490 contracts, vs. open interest of 9,119.

During this trading session, "options spell divergence in the larger market," said Jay Shartsis, director of options trading at

R.F. Lafferty

. "It's incredible. I've never seen anything like it. Suddenly the market is a two-tier business where the former leaders

in technology, for example are getting trashed, but others have taken up the lead."

"When the leading group cracks, it's usually bad for the market, but people are just moving into oils, chemicals, much more basic stocks."

Have the underlying fundamentals changed that much for these once-reviled cyclicals? Not really, traders said. That fact, however, hasn't stopped Wall Street from buying the story.


(DD) - Get Report

is just one of several cyclical stocks that are suddenly the darlings of money managers.

International Paper

(IP) - Get Report

is "another cyclical that is extremely overbought after a big, recent run," said Larry McMillan, head of

McMillan Analysis

. DuPont stock was up 3/8 to 68 3/16 as call buyers scattered their interest across the company's options string.

Philip Morris

(MO) - Get Report

stock gained 1/4 to 35 3/16. Options investors rolled about 3,500 April 32 1/2 calls into May 32 1/2 calls, which were up 1/4 ($25) to 3 5/8 ($362.50).

Meanwhile, the

Chicago Board Options Exchange

volatility index, which measures implied volatility of several OEX strikes and typically moves opposite to the stock market, inched up 0.74, or 2.2%, to 25.51 by midday.

It wasn't bothering too many players. "It's still in a neutral range, fairly low," said Shartsis.