Schaeffer's Trading Floor Blog
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Momentum names that made notable moves on Wednesday and could continue to do so into Thursday's session include video game retailer GameStop Corp. (NYSE:GME), firearms specialist Smith & Wesson Holding Corp (NASDAQ:SWHC), and technology concern Corning Incorporated (NYSE:GLW). Here is a quick look at these stocks ahead of tomorrow's opening bell.

GameStop Corp. (NYSE:GME)

GameStop surged 3.8% today to close at $38.75, in the wake of yesterday's news that the company's board of directors approved a 20% increase to GME's regular annual cash dividend. As such, call volume ramped up to more than two times the average daily amount, outnumbering puts by a nearly 4-to-1 margin. Of particular interest were calls set to expire within the next six-plus weeks, as these options accounted for nine of the 10 most active strikes of the day. Considering short interest makes up 31.7% of GME's float, some of today's heavy call activity -- particularly at out-of-the-money strikes -- may have been the work of short sellers hedging against more upside.

Smith & Wesson Holding Corp (NASDAQ:SWHC)

Smith & Wesson wowed Wall Street last night with its stronger-than-expected fiscal third-quarter earnings report. Subsequently, the shares spiked 16.4% in today's session to perch at $13.74, territory not seen on a daily closing basis since Jan. 23. Meanwhile, SWHC's total options volume climbed to more than eight times what is typically seen in an average session. A significant number of traders on both sides of the aisle placed bets at March-dated strikes, with these options making up nine of the 10 most active options of the day. Like GME, SWHC has also racked up a heavy amount of short interest -- nearly 32% of its float is sold short. So, some of today's call action could be attributed to short sellers picking up options-related insurance against more gains.

Corning Incorporated (NYSE:GLW)

Corning has bounced more than 3% over the past two days to trade at $19.66 (and tagged a two-year high of $19.82 in today's session), following the company's announcement of its accelerated share repurchase program. Nevertheless, 26,000 puts -- triple the expected daily amount -- crossed the tape today, almost all of which changed hands at the May 19 and 20 strikes. This bias toward short-term puts is nothing new in GLW's options pits. The stock's Schaeffer's put/call open interest ratio (SOIR) of 1.24 ranks higher than all comparable readings from the past year, meaning short-term speculators are more put-heavy now than they have been at any other time during the last 12 months.


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