By David Russell of
optionMONSTER.com Below is a compilation of some important stories that ran Wednesday on optionMONSTER.com. optionMONSTER was co-founded by Deep in the Money Calls author Pete Najarian and uses advanced monitoring systems to detect trading patterns by large institutional traders and retail investors. What money flows are telling us: It is not unusual for new money flows, which typically come in at the start of each month, to influence prices. That may be part of what we are seeing today. Put sellers see bottom in Moody's ( MCO): As Congress investigates the credit-rating company, one investor seems to think that its stock has seen the worst of the downside. Big bet on emerging markets ETF: An institutional option trader is making a large bet that the EEM exchange-traded fund will move significantly in the next six weeks. Dish Networks ( DISH) faces bearish position: The satellite TV operator has been drifting lower since reversing sharply last month, and now one trader is positioning for a further push to the downside. Legg Mason ( LM) sees range-bound trade: The asset-management firm hasn't seen much in the way of options action, but we see more than 10 times its daily average this morning essentially in one trade. VIX option volume sets record in May: The VIX appears to be entering its own period of secular growth after several years of gradually winning acceptance as a hedging mechanism.
Wednesday Pre-MarketPay attention to the bid/ask spread: Most traders don't pay much attention to the bid/ask spreads of options, but they can provide vitally important information. Bears look for Fifth Third ( FITB) to slump: The bank hasn't yet repaid its government bailout money and is still struggling with heavy losses. Now it looks as if it is ready to test further to the downside. Traders bullish in Tenet ( THC) despite drop: The health care company plunged yesterday after saying it might acquire an Australian company, but the options activity was bullish. General Mills ( GIS) faces range-bound trade: The food company has been consolidating near its all-time highs since December, and now one investor thinks it will stay there for the next three weeks.
Trader sticks with Plains Exploration ( PXP): The oil and gas company plunged to a new 52-week low during yesterday's session, yet the option volume was in the calls. Alliance Data ( ADS) draws volatility trade: The financial data company has been falling after investors worried that new regulation introduced in mid-May could reduce transaction volume in the industry.