Options in Motion: MCI

Ford and Northwest are also active.
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Option activity began to pick up Wednesday as traders got ready for the expiration at the end of the week.

The CBOE Market Volatility Index, which is based on the implied volatility of the

S&P 500

options and is used as a gauge for fear in the market, was recently up 3.3% to $12.80. The CBOE Nasdaq Volatility Index, a measure of the implied volatility of the

Nasdaq 100

, was recently down 2.3% to $14.62.

MCI

(MCIP)

topped the active list in early trading. The September 25/October 25 call spread traded 39,000 times.

In this case, a trader likely bought the October 25 calls and sold the September 25 calls, simply rolling their position out another month ahead of the expiration on Friday. The October 30 calls traded 10,500 contracts. The stock was down 2 cents, or 0.1%, to $25.61.

Bristol-Myers Squibb

(BMY) - Get Report

had the March 22.50/January 2007 22.50 put spread trade 17,900 times. Here, someone sold the March puts and bought the January 2007 puts. The stock was down 17 cents, or 0.7%, to $24.69.

Morgan Stanley

(MWD)

saw the October 50/55 strangle trade 10,500 times. With this strategy, the trader has bought the 50 puts and sold the 55 calls. The buyer of a strangle is hoping for a volatile move of the stock in any direction. Morgan Stanley reports earnings next week. The stock was up 26 cents, or 0.5%, to $52.85.

OmniVision Technology

(OVTI)

had the September 15/October 15 put spread trade 10,500 times as the stock traded lower by 31 cents, or 2.3%, to $13.34.

Ford

(F) - Get Report

attracted a buyer of the January 12.50 calls, as almost 20,000 contracts have traded so far on the day. The stock was up 16 cents, or 1.6%, to $9.98.

Elsewhere,

Northwest Airlines'

(NWAC)

September 2.50 calls traded 10,000 contracts as the stock regained some of its losses from Tuesday. The stock was up 37 cents, or 23.6%, to $1.94.