The uneasy feeling surrounding
anticipated asset sale is coming through loud and clear in the options market for the second straight day.
Yesterday, put buyers stormed the barricades and pumped up volume on the July 30 puts to more than 1,700, clearly speculating on difficulties with the company's planned selloff of assets. "Something bad is happening in Triton," reported one
Philadelphia Stock Exchange
options trader yesterday. "There are big put buyers at 30."
Today, the stock was down again -- 2 3/16 to 29 7/16 -- and put buying continued, with almost 1,100 of the August 30 puts and more than 400 of the July 30 puts trading before noon. Some activity also was starting to show up in the August 25 puts, where 250 traded against open interest of just 415.
"Yesterday, the stock was down in the face of a generally strong group. The suspicion out there is either no one has shown up to buy them or that these guys are going to have a hell of a hard time getting an acceptable price," said a money manger who is short the stock. "The rumor is the board is meeting today and an announcement will be forthcoming by the end of the month."
The uncertainty also created call volume. Call holders were also heading for the exits, as more than 1,100 July 35 calls and 2,800 August 35 calls traded. The price of the August contracts fell to 1 3/8 ($187.50) from 3 ($300) today. The stock could move violently in either direction, depending on what the company reports in its next announcement.
The difficult choice for options traders is whether to speculate in the July or the August options. If an announcement isn't made before the Friday options expiration, the cost of the speculation would have been wasted. If one is made, the additional price paid for an August options position would take a big hit because the stock would likely become less volatile.
Triton is in a quiet period and thus prevented from commenting on the activity on the possibilities surrounding its sale of assets in the Bay of Thailand and Colombia. Conceptually, the company will have a lot of trouble selling its assets, the money manager added. In late April, Triton announced it had reached a preliminary agreement to sell natural gas from its block in the Bay of Thailand to the state oil companies of Thailand and Malaysia. Continuing economic troubles in the region, however, have diminished the prospects for a sale from both the financing and demand ends of the equation.
has that morning-after glow today coming from its earnings announcement yesterday.
The chip maker's shares were up 2 5/16 to 83 1/16 today, and call buying was in full swing. The August 85 calls traded close to 6,000 contracts by noon, pulling the price of the options up 7/16 ($43.75) to 2 5/8 ($262.50). Traffic also was building in the August 90 calls, as volume cracked 1,600 early in the day.
The July 80 calls, though, were the big trader, as more than 14,000 changed hands. Some of it could have been rolled "up and out" to higher strike prices in August, and some of it could have been some speculators playing for an expiration-related upswing.
Strategists have noticed only a slight change in the volatility in the post-earnings trading today.
options strategist Gary Semeraro said he hadn't seen a big change in the premiums and that it appeared that the July 80 calls were being used as a stock surrogate for the few days remaining in the cycle. "The consensus for these earnings said we weren't expecting any surprises," he said, adding that those convictions kept a lid on the implied volatility of Intel options. "The Street is feeling better about the stock."
strategist Kyle Rosen pointed out that the July 80 calls were selling for just over 3, about parity for that call with the company's shares slightly above 83. He speculated that some of the July 80 action may have been call sellers giving themselves a three-day hedge on any short-term turnaround.