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Option Clips: Alcatel Lucent SA, Zynga Inc, and First Solar, Inc.

Reviewing notable options activity on Alcatel Lucent SA (ADR), Zynga Inc, and First Solar, Inc.

by 1/2/2014 12:36 PM
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Three equities drawing attention from options traders today are telecommunications concern Alcatel Lucent SA (ADR) (NYSE:ALU), online gaming issue Zynga Inc (NASDAQ:ZNGA), and alternative energy company First Solar, Inc. (NASDAQ:FSLR). Here's a look at how traders have been aligning their speculative bets today.

  • Alcatel Lucent SA (ADR) (NYSE:ALU) call volume is running at nearly eight times the typical rate today, thanks to what appears to be the initiation of a long call spread. Earlier today, two blocks totaling 8,000 contracts changed hands at the January 2015 2.83-strike call at the ask price of $2.00 apiece, suggesting they were purchased. Meanwhile, two symmetrical blocks simultaneously switched hands at the January 2015 6.83-strike call closer to the bid price at $0.40 each, implying they were sold. By establishing the spread, the trader will begin to profit with each step north of breakeven -- that is, $4.43 (purchased strike plus net debit of $1.60) -- ALU moves during the next 12-plus months. Risk is limited to the initial cash outlay. At last check, ALU was lingering near $4.44.

  • Zynga Inc (NASDAQ:ZNGA) is bucking the broad-market trend lower today, tacking on 2.9% to trade at $3.91. As such, call volume has more than doubled its average intraday pace so far, and the most sought-after strike is the weekly 1/10 4-strike call. The majority of the 5,540 contracts traded here have done so on the ask side, and volume easily outstrips open interest, pointing to buy-to-open activity.

  • First Solar, Inc. (NASDAQ:FSLR) has also seen a rush of activity on the call side today, which isn't surprising, considering the stock is 4.7% higher this afternoon to linger near $57.19. Short-term speculators are targeting the January 2014 60-strike call, which has seen 1,520 contracts change hands -- mostly at the ask price. With implied volatility up 4.2 percentage points, it appears a fresh batch of bullish bets was initiated. Delta for the call is docked at 0.35, suggesting a 35% chance of an in-the-money finish.


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