Schaeffer's Options Center
Sponsored by:
Schaeffer's Daily Option Blog

Option Clips: AT&T Inc., Dollar General, and Alcatel Lucent SA (ADR)

Reviewing notable options activity on AT&T Inc., Dollar General Corp., and Alcatel Lucent SA (ADR)

by 3/20/2014 2:28 PM
Stocks quoted in this article:

One equity generating buzz on StockTwits today is telecom titan AT&T Inc. (NYSE:T). Meanwhile, discount retailer Dollar General Corp. (NYSE:DG) and France-based IT concern Alcatel Lucent SA (ADR) (NYSE:ALU) have also been active in the options pits. Here's a look at how traders have been aligning their speculative bets today.

  • AT&T Inc. (NYSE:T) is 2.8% higher at $33.88, after the firm announced that pre-orders on the Samsung Galaxy S5 begin tomorrow. However, the equity is struggling to surmount its 32-week moving average, which has largely acted as resistance since mid-2013. In any event, the stock's short-term options are in demand today, as its 30-day at-the-money implied volatility (IV) is 8.5% higher at 14.1%. Calls and puts are trading at two and three times the norm, respectively, and it looks like one speculator may be simulating stock ownership with a split-strike version of the synthetic long stock strategy. Specifically, the trader may have bought to open October 34 calls, and funded the position by selling to open October 32 puts.

  • Dollar General Corp. (NYSE:DG) is 0.5% lower at $57.54, but one speculator is rolling the dice on an intermediate-term uptrend for the shares. So far today, DG has seen roughly 50,000 calls cross the tape -- five times the norm. Most of the action transpired at the August 60 call, where a block of more than 35,000 contracts traded on open interest of fewer than 5,200 contracts. Trade-Alert indicates the calls were purchased to open for $3.30 apiece, meaning the buyer will make money if DG is sitting north of $63.30 (strike plus premium paid) -- which would mark a new record high -- when August-dated options expire.

  • Finally, Alcatel Lucent SA (ADR) (NYSE:ALU) has added 1.9% to flirt with $3.95, but still sits 10% lower on the year. In the options pits, puts are flying off the shelves at a rapid-fire rate, with roughly 16,000 contracts traded -- about 10 times the stock's average intraday volume. One options trader is bracing for steeper losses over the next few months, buying to open nearly 12,000 June 2.83 puts for $0.10 each. To profit on the play, the buyer needs ALU to breach $2.73 (strike minus premium paid) by options expiration on Friday, June 20.

permalink

Featured Brokers
ADVERTISEMENT
Unusual Option Volume
Option Flow
ADVERTISEMENT
ADVERTISEMENT
Most Active Stocks
Most Active Option Strikes
Largest Open Interest

Partner Center

© 2014 Schaeffer's Investment Research, Inc. 5151 Pfeiffer Road, Suite 250, Cincinnati, Ohio 45242 Phone: (800) 448-2080 FAX: (513) 589-3810 Int'l Callers: (513) 589-3800 Email: service@sir-inc.com

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

Market Data provided by QuoteMedia.com | Data delayed 15-20 minutes unless otherwise indicated.