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Option Clips: Netflix, Inc., Under Armour Inc, and Texas Instruments

Reviewing notable options activity on Netflix, Inc., Under Armour Inc, and Texas Instruments Incorporated

by 1/23/2014 12:52 PM
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Three equities drawing attention from options traders today are streaming service Netflix, Inc. (NASDAQ:NFLX), athletic apparel issue Under Armour Inc (NYSE:UA), and semiconductor specialist Texas Instruments Incorporated (NASDAQ:TXN). Here's a look at how traders have been aligning their speculative bets today.

  • Netflix, Inc. (NASDAQ:NFLX) soared to a record peak of $395.63 this morning, thanks to last night's strong fourth-quarter earnings report and subsequent round of bullish brokerage notes. At last check, the equity had pared a portion of these earlier gains, but was still up 14.6% to trade at $382.31. In the options pits, the weekly 1/24 400-strike call is the most active, and activity is evenly spread on both the bid and the ask side. With volume outstripping open interest, it appears this out-of-the-money strike is seeing a mix of selling- and buying-to-open activity, respectively.

  • Under Armour Inc (NYSE:UA) call volume has soared to 11 times the average intraday pace this afternoon, with a number of speculators betting on an earnings-induced boost. More than 3,800 weekly 1/31 84-strike calls have changed hands, almost all on the ask side. Implied volatility has jumped 6.7 percentage points, and volume exceeds current levels of open interest, indicating the initiation of new bullish positions. Big post-earnings moves to the upside aren't uncommon for UA -- the equity added 12.2% following its second-quarter results last July. UA will reveal its fourth-quarter results one week from today. In today's session, Under Armour was last seen trading at $83.00.

  • Texas Instruments Incorporated (NASDAQ:TXN) was targeted for a long put spread today, despite the stock boasting a roughly 33% year-over-year advance to linger near $44.28. Specifically, two symmetrical blocks of 9,695 April 42 and 45 puts traded in unison earlier -- the former below the bid price for $0.85, and the latter closer to the ask price for $2.23. Data from the International Securities Exchange (ISE) confirms that new positions were initiated. Ideally, TXN will finish right at $42 at the close on Friday, April 18, when the options expire. Breakeven for the spread is $43.62, or the bought put, less the net debit of $1.38. Risk, meanwhile, is limited to the initial cash outlay.


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