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Option Clips: General Motors, Google, and Ubiquiti Networks

Reviewing notable options activity on General Motors Company, Google Inc, and Ubiquiti Networks Inc

by 3/12/2014 1:12 PM
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Three equities generating buzz on StockTwits today are automaker General Motors Company (NYSE:GM), Internet search titan Google Inc (NASDAQ:GOOG), and technology concern Ubiquiti Networks Inc (NASDAQ:UBNT). Here's a look at how traders have been aligning their speculative bets today.

  • General Motors Company (NYSE:GM) is down 0.8% at $34.91, as Congress continues to investigate the company's recall practices. Total options volume is running at more than double the normal intraday rate, with around 81,000 calls and 44,000 puts exchanged. Digging deeper, the International Securities Exchange (ISE) confirms some buy-to-open activity at the April 35 call, where about 9,500 contracts have changed hands. However, the out-of-the-money March 37 call remains most popular, with more than 13,000 contracts traded so far today.

  • Google Inc (NASDAQ:GOOG) is bucking the broad-market trend lower, up 0.2% at $1,201.82. Against this backdrop, the round-number 1,200 strike remains in focus among short-term options traders. The stock's weekly 3/14 1,200-strike call is most active so far, with more than 2,200 contracts exchanged. It seems a healthy portion of the action consists of newly bought bullish bets, as the majority of the calls traded on the ask side, and volume has surpassed open interest at the strike. By purchasing the calls to open, the traders expect GOOG to continue its ascent north of $1,200 through Friday's close, when the contracts expire.

  • Finally, Ubiquiti Networks Inc (NASDAQ:UBNT) has added 4.4% to flirt with $51.35 on no particular news, sparking a run on call options. At last check, UBNT had seen more than 2,600 calls cross the tape -- a 94% mark-up to the security's average intraday volume. Upon closer inspection, it looks like buyers are scooping up the out-of-the-money June 55 call, where more than 1,000 contracts have traded, primarily at the ask price. Plus, volume has exceeded open interest at the strike, underscoring our theory of fresh initiations. The goal of the buyers is either to profit from UBNT's move north of $55 -- which would mark a record high -- by June options expiration, or to hedge their shorted shares in the event of an extended ascent. Short interest rose 3.2% during the past two reporting periods, and now accounts for 18.3% of the equity's total available float.


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