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Option Clips: McDonald's, GW Pharmaceuticals, and Intuitive Surgical

Reviewing notable options activity on McDonald's Corporation, GW Pharmaceuticals PLC- ADR, and Intuitive Surgical, Inc.

by 4/22/2014 1:50 PM
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Three equities generating buzz on StockTwits today are big-cap restaurateur McDonald's Corporation (NYSE:MCD), drug maker GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH), and medical robot manufacturer Intuitive Surgical, Inc. (NASDAQ:ISRG). Here's a look at how traders have been aligning their speculative bets today.

  • McDonald's Corporation (NYSE:MCD) has wavered around breakeven today, but was last seen 0.2% lower at $99.51 in the wake of the company's weaker-than-expected first-quarter earnings. Overall option volume is trading at twice the intraday norm, and the equity's 30-day at-the-money (ATM) implied volatility (IV) has seen a post-earnings plunge of 19.1% to 11.6%. The shares of MCD have peeked into the black at various points so far today, touching an intraday acme of $100.27 -- which may have prompted some speculators to cash in their chips at the century mark. The most active option is the weekly 4/25 100-strike call, where more than 12,000 contracts have traded, primarily at the bid price. What's more, the International Securities Exchange (ISE) confirms that a healthy portion of the calls were sold to close.

  • GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) has rallied 37.3% to $63.20, thanks to a brokerage nod at Morgan Stanley. Specifically, the analysts initiated coverage of GWPH with an "overweight" rating and a $103 price target -- more than double the stock's closing price of $46.04 on Monday -- amid optimism about the biopharmaceutical firm's experimental epilepsy drug, Epidiolex. After touching a 52-week high earlier in the session, the stock's 30-day ATM IV has retreated 5.1% to 120.3%. Meanwhile, calls are trading at 28 times the normal intraday pace, with possible buy-to-open activity detected at the May 60, 65, and 80 strikes.

  • Finally, Intuitive Surgical, Inc. (NASDAQ:ISRG) has advanced 2.7% to $422.30, after its da Vinci Sp Surgical System received marketing clearance from the Food and Drug Administration. Ahead of tonight's turn in the earnings confessional, ISRG calls are outpacing puts, with the weekly 4/25 450-strike and 5/2 445-strike calls garnering the most attention. From a broader sentiment standpoint, today's affinity for short-term calls is just more of the same for ISRG. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.73 sits just 2 percentage points from an annual low, implying that short-term options players have rarely been more call-heavy during the past year.


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