Maybe it's the gold dust rubbing off, or maybe options investors just know that the
initial public offering -- like the sun -- will reflect a bit of shine onto other financials, though probably ever so briefly.
$10.6 billion offer for
seem to be the primary reasons that call options on bank stocks sparkled today. Heavy activity has ranged from the well-known
Republic New York
to the not-so-well-known
Goldman Sachs' planned IPO is due to price Monday evening after the close of trading, and it's already having some effect on the rest of the market universe. "What's happened is that in the midst of a slow day, with London closed, some people could be lifting the sector up, what with the Goldman coming out," said the head of one options desk. "Or, what they may do is buy bank stock calls instead."
Moreover, "it's likely Goldman will be included in the banking index because of its capitalization and prestige," he added. "It will be a great option to trade, and there will be a number of floors likely jockeying" for the top market share on the listing once it becomes options-eligible.
Republic New York's out-of-the-money June 65 calls gained 3/8 ($37.50) to 3 1/8 ($312.50) on heavier-than-usual volume of 501 contracts. Open interest totaled 163 contracts. Republic New York stock popped up a buck to 59 3/4.
Huntington Bancshares' June 40 calls piped up 3/8 ($37.50) to 11/16 ($68.75), nearly doubling on volume of 300 contracts.
was up 1/57, or 0.17%, to 922.46.
Both put and call option activity in
Advanced Tissue Sciences
surged Monday, with retail buyers apparently bidding up the calls and bigger investors bidding up the puts.
"There were takeover rumors, but big players are selling the June 5 calls and buying the June 10 puts," according to a source in the
ATIS options crowd, who confirmed the unusual volume. "That means they don't believe it's happening, even though there is also retail call-buying at the margins," the trader said. "Perhaps instead of a takeover, there will be some sort of cash infusion. But it seems like they don't think
a takeover is good to go."
The June 5 calls in Advanced Tissue gained 7/16 ($43.75) to 15/16 ($93.75) on volume of 1,739 contracts against open interest of 3,008. June 10 puts, meanwhile, lost 3/8 ($37.50) to 5 ($500) on volume of 1,150 and open interest of 1,310 contracts.