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Option Clips: Buffalo Wild Wings, Sony Corporation, and Yahoo! Inc.

Reviewing notable options activity on Buffalo Wild Wings, Sony Corporation (ADR), and Yahoo! Inc.

by 2/4/2014 3:22 PM
Stocks quoted in this article:

Two equities generating buzz on StockTwits today are restaurateur Buffalo Wild Wings (NASDAQ:BWLD) and entertainment issue Sony Corporation (ADR) (NYSE:SNE). Internet titan Yahoo! Inc. (NASDAQ:YHOO), meanwhile, is also garnering unusual attention in the options pits. Here's a look at how traders have been aligning their speculative bets today.

  • Buffalo Wild Wings (NASDAQ:BWLD) will step into the earnings confessional after the closing bell today. Ahead of the event, option volume is running at seven times the intraday norm, with roughly 5,500 calls and 5,900 puts exchanged. Short-term option premiums are elevated due to escalating pre-earnings demand, as the stock's Schaeffer's Volatility Index (SVI) of 56% stands higher than 69% of all other readings of the past year. At last check, BWLD is 3.4% higher at $140.66.

  • Sony Corporation (ADR) (NYSE:SNE) is 6.3% higher at $16.21, on reports the company is in talks to sell its PC business to Japan Industrial Partners for as much as $490 million. What's more, option traders are gambling on even more upside for SNE, which is slated to report earnings before the open on Thursday. SNE has seen close to 6,700 calls cross the tape today, representing a 42% mark-up to its typical intraday volume. More specifically, bulls are buying to open the weekly 2/7 16-strike call, which has seen nearly 1,350 contracts change hands on open interest of fewer than 200 contracts. The security could run into a technical wall in the form of its 10- and 20-week moving averages, which have ushered Sony lower since October.

  • Yahoo! Inc. (NASDAQ:YHOO) is 2.4% higher at $35.75, and one option trader is cautiously bullish on the stock. The speculator purchased to open 10,925 March 35 calls for $1.88 apiece, and simultaneously sold to open a symmetrical block of March 37 calls for $1.06 each, resulting in a net debit of $0.82 per pair of calls. The investor will profit the higher YHOO treks north of $35.82 (bought strike plus net debit), though his profit potential is capped at $1.18 per pair of options (difference between strikes less the net debit), no matter how far YHOO should rally atop $37 by March options expiration. Risk is capped at the initial premium paid for the long call spread, should YHOO retreat beneath $35.


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