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3D Systems Corporation (DDD) Bulls Rally Amid Unexpected Surge

3D Systems Corporation calls are trading at four times the intraday pace today

by 7/1/2014 12:22 PM
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After finishing June out on a high note, 3D Systems Corporation (NYSE:DDD) is in rally mode once again today -- up more than 11% at last check amid a sector-wide surge. What's more, the stock has shot through the round-number $60 mark, which has kept DDD at bay since late March. Not surprisingly, calls are trading at four times what is typically seen at this point in the day, and are outpacing puts by a more than 2-to-1 margin.

The most active DDD strike thus far is the weekly 7/3 70-strike call, where 4,532 contracts have changed hands. The majority of these traded at the ask price, implied volatility has shot 20.7 percentage points higher, and volume outstrips open interest, collectively pointing to buy-to-open activity. The volume-weighted average price (VWAP) for these calls is $0.66, making breakeven at this Thursday's 1:00 p.m. ET close $70.66 (strike plus VWAP). Gains are theoretically unlimited with each additional move north of here, while losses are capped at the initial premium paid, should DDD settle south of the strike at the end of the holiday-shortened week.

Also receiving notable attention among option bulls is DDD's July 65 call. Here, nearly 3,600 contracts have been exchanged -- mostly at the ask price, pointing to buyer-driven activity. What's more, IV is up 16.2 percentage points, hinting at the initiation of new positions. The VWAP for these calls is $2.48, making at-expiration breakeven $67.48 (strike plus the VWAP). Of note, today's bullish gap sent the shares to an intraday high of $68.65, although 3D Systems Corporation (NYSE:DDD) was more recently seen lingering near $66.58.


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