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Option Clips: LinkedIn, Facebook Inc (FB), and TASER International

Reviewing notable options activity on LinkedIn Corp, Facebook Inc, and TASER International, Inc.

by 6/10/2014 2:02 PM
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Three names seeing notable option activity today amid developing news and/or unusual price action are social networking sites LinkedIn Corp (NYSE:LNKD) and Facebook Inc (NASDAQ:FB), as well as stun-gun maker TASER International, Inc. (NASDAQ:TASR). Here's a look at how today's option traders have been placing their bets on these three names.

  • LinkedIn Corp (NYSE:LNKD) -- which is hosting its annual shareholder meeting today -- is 3.2% higher at $161.41. Intraday call volume is running at a 72% mark-up to the norm, with roughly 14,000 calls across the tape. Most active is the weekly 6/13 162.50-strike call, where close to 1,800 contracts have changed hands. A healthy portion of the calls traded on the ask side, implied volatility (IV) is trending higher, and volume has surpassed open interest at the strike -- collectively pointing to newly bought bullish bets. By purchasing the calls to open, the buyers expect LNKD to extend today's upward momentum and settle north of $162.50 on Friday, when the weekly options expire.

  • Facebook Inc (NASDAQ:FB) is up 3.9% at $65.33, after the head of eBay Inc's (NASDAQ:EBAY) PayPal division left to join the FB team, and FB-owned Instragram unveiled plans to take its advertising business international. So far today, FB has seen more than 340,000 calls cross the tape -- more than twice its intraday average, and nearly triple the number of FB puts exchanged. Digging deeper, short-term bulls have shown an affinity for the June 65 and 67.50 calls, where the majority of the contracts traded on the ask side, and IV is muscling higher. The speculators are hoping FB builds on today's upward trajectory and ends atop the respective strikes at the close on Friday, June 20, when front-month options expire. Now is an opportune time to gamble with FB options, as the stock's Schaeffer's Volatility Scorecard (SVS) stands at a lofty 100. In other words, FB has tended to make outsized moves on the charts during the past year, relative to what the options market has priced in.

  • Finally, TASER International, Inc. (NASDAQ:TASR) is 4.7% higher at $14.16, as traders digest the addition of former FB Chief Technology Officer Bret Taylor to the company's board of directors. The equity's 30-day at-the-money IV has popped 1.2% to 39.8%, reflecting a growing demand for TASR's short-term options. Specifically, calls are the options of choice, with intraday volume running at nine times the norm. However, it appears some speculators are employing calls to gamble on a short-term ceiling for TASR. The out-of-the-money June 15 call has seen close to 1,300 contracts exchanged -- but mostly on the bid side. IV at the strike has jumped 6 percentage points, and volume trumps open interest, hinting at fresh initiations. By writing the calls to open, the sellers expect TASR -- which has advanced 50% over the past year -- to remain south of $15 through options expiration on Friday, June 20.


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