10/27/2009 3:43 PM
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AMR
Put volume ballooned to more than twice the norm yesterday on AMR Corporation (AMR), with about 16,000 of these bearishly oriented options crossing the tape. Traders on the International Securities Exchange (ISE) snapped up their fair share of long puts, with 10,145 contracts bought to open on Monday. By contrast, ISE speculators snapped up only 588 calls on AMR yesterday.
The center of attention was the stock's December 6 put, where 10,371 contracts changed hands. About 83% of these puts traded at the ask price, pointing to buying activity, and implied volatility jumped 5.4% as a result. Open interest at this back-month strike spiked overnight from 760 contracts to 10,358 contracts, confirming that nearly all of Monday's volume consisted of newly opened positions.
Yesterday's onslaught of put volume occurred as AMR extended its short-term slide on the charts. The equity is now in danger of finishing the week below support at its 20-week moving average, which would mark the first breach of this trendline since mid-July.
However, in today's trading, the bearish bias is not so pronounced. In fact, some traders are downright unsure -- among the session's option volume, it appears that one speculator has initiated a long straddle on the airline issue. AMR's January 2010 5-strike call and put each traded a block of 200 contracts apiece shortly before midday, and the contracts appear to have been bought. This indicates that the option player is looking for serious movement during the near term, but is unsure which way the equity will swing.
-posted by Elizabeth Harrow
10/27/2009 3:43 PM
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