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Option Clips: Tesla Motors, Zebra Technologies, and Applied Materials

Reviewing notable options activity on Tesla Motors Inc, Zebra Technologies Corp., and Applied Materials, Inc.

by 4/15/2014 1:42 PM
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Two equities generating buzz on StockTwits today are electric car maker Tesla Motors Inc (NASDAQ:TSLA) and barcode printing issue Zebra Technologies Corp. (NASDAQ:ZBRA). Meanwhile, semiconductor concern Applied Materials, Inc. (NASDAQ:AMAT) is also garnering attention in the options arena. Here's a look at how traders have been aligning their speculative bets today.

  • Tesla Motors Inc (NASDAQ:TSLA) is down 6.5% at $185.15, amid news that direct-to-consumer sales will remain banned in Arizona. The stock is in danger of ending beneath its 80-day moving average for the first time since Jan. 13, and options players are rolling the dice on limited short-term upside for the stock. TSLA has already seen roughly 71,000 calls and 71,000 puts change hands, compared to its average intraday volume of about 50,000 calls and 48,000 puts. What's more, the equity's 30-day at-the-money (ATM) implied volatility (IV) is 2.3% higher at 76.9%, underscoring the growing demand for short-term contracts. Digging deeper, "vanilla" option bears are buying to open the April 190 put, on expectations for TSLA to extend its retreat beneath the strike through the end of the holiday-shortened week, when front-month options expire. More conservative skeptics are apparently selling to open the April 200 call, and will retain the initial premium received as long as TSLA stays south of $200 through Thursday's close.

  • Zebra Technologies Corp. (NASDAQ:ZBRA) has surrendered 10.7% to trade at $60.96 -- landing on the short-sale restricted list -- as speculators react to its purchase of Motorola Solutions Inc's (NYSE:MSI) enterprise business. Short-term options are hot today, as the equity's 30-day ATM IV is 32.8% higher at 34.5%, after earlier tagging a new 52-week peak. Overall options volume is running at 48 times the norm, with neutral-to-bearish bettors centering on the April 65 call, which is most active with more than 700 contracts exchanged. About two-thirds of the calls have crossed on the bid side, IV has shot higher, and volume has exceeded open interest at the strike -- all signs of sell-to-open activity. By writing the calls to open, the sellers expect ZBRA to remain beneath $65 through Thursday's close, when front-month options expire.

  • Finally, Applied Materials, Inc. (NASDAQ:AMAT) is following the broader equities market into the red, down 3.3% at $18.40 -- which would represent its lowest close since mid-February. However, options traders are expecting AMAT to stage a steady rebound -- and explore multi-year highs -- with call volume running at four times the norm. More than half of the intraday action has transpired at the January 2015 22-strike call, where nearly 14,350 contracts have traded, including a block of 9,455 that crossed at the ask price of $0.74. IV is edging higher at the strike, hinting at newly bought bullish bets. By purchasing the LEAPS to open, the buyers will make money if AMAT is sitting atop $22.74 (strike plus premium paid) -- in territory not charted since August 2007 -- when January 2015 options expire. Delta on the calls sits at 0.27, implying a roughly 1-in-4 shot of an in-the-money finish.


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