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Option Clips: Sears Holdings, Sprint, and SodaStream International

Reviewing notable options activity on Sears Holdings Corp, Sprint Corporation, and SodaStream International Ltd

by 2/11/2014 2:30 PM
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Two equities generating buzz on StockTwits today are retailer Sears Holdings Corp (NASDAQ:SHLD) and telecom concern Sprint Corporation (NYSE:S). Beverage issue SodaStream International Ltd (NASDAQ:SODA), meanwhile, is also garnering unusual attention in the options pits. Here's a look at how traders have been aligning their speculative bets today.

  • Sears Holdings Corp (NASDAQ:SHLD) is following the broader equities market higher today, up 8% at $38.56 -- and on pace to end atop its 20-day moving average for just the third time since late November. Option players are rushing to place their bets on the shares, as the equity's 30-day at-the-money (ATM) implied volatility (IV) at one point was up 1.4% at a new annual high of 77.3%. Despite today's advance, SHLD remains roughly 20% lower on a year-over-year basis, and the stock just touched a two-year low of $32.85 last week. As such, option buyers today are honing in on the out-of-the-money January 2016 30-strike put, which will move into the money if SHLD breaches $30 within the next 23 months.

  • Sprint Corporation (NYSE:S) is 2.3% higher at $7.86, as investors digest the company's stronger-than-expected fourth-quarter earnings and tablet subscriber growth. Calls are the options of choice today, with volume running at seven times the average intraday rate. However, many front-month speculators may be hitting the exits in the wake of today's move higher. The February 9 call has seen nearly 48,000 contracts trade, including one block of almost 30,000 that went off close to the bid price. With open interest sitting at nearly 63,000, it is possible these are being sold to close ahead of expiration

  • SodaStream International Ltd (NASDAQ:SODA) has rallied 7.7% to $43.56, with the stock looking for its best finish since Jan. 10, before the company issued an earnings warning. Overall option volume is trading at three times the norm, and the security's 30-day ATM IV is up 11.5% at 80.1%, a new annual high. While calls are the options of choice -- 20,000 traded, compared to 8,700 puts -- the March 40 put has garnered the most attention, with more than 2,100 contracts exchanged. More specifically, it looks like speculators have purchased the puts to open, in order to gamble on a near-term retreat beneath the $40 level.


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