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Option Clips: BroadSoft Inc, Agilent Technologies Inc., and Nike Inc

Reviewing notable options activity on BroadSoft Inc, Agilent Technologies Inc., and Nike Inc

by 5/5/2014 1:08 PM
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Two equities generating buzz on StockTwits today are software concern BroadSoft Inc (NASDAQ:BSFT) and electronic measurement provider Agilent Technologies Inc. (NYSE:A). Meanwhile, athletic apparel issue Nike Inc (NYSE:NKE) is also popular in the options pits. Here's a look at how traders have been aligning their speculative bets today.

  • BroadSoft Inc (NASDAQ:BSFT) has plummeted 20% to $20.01 -- and earlier tagged a new three-year low of $18.88 -- after reporting weaker-than-expected quarterly earnings and guidance. As such, the stock landed on the short-sale restricted list, sending bears to the options pits. Overall option volume is running at 35 times the norm, and the May 20 put is most active, with roughly 800 contracts exchanged. About two-thirds of the front-month puts crossed on the ask side, and volume has surpassed open interest, hinting at newly bought bearish bets. By purchasing the round-number puts to open, the buyers expect BSFT to be trading south of $20 at the close on Friday, May 16, when the options expire. Delta on the puts has swung to negative 0.48 from negative 0.10 at Friday's close, pointing to a near 1-in-2 shot of expiring in the money.

  • Agilent Technologies Inc. (NYSE:A) is 0.4% higher at $54.75, but one options trader is either gambling on or hedging against a significant near-term decline. The stock's 30-day at-the-money (ATM) implied volatility (IV) is 4.7% higher at 28.2%, and intraday put volume is running at 16 times the average rate. Nearly all of the volume has transpired at the out-of-the-money May 47 put, where a block of 10,000 contracts was seemingly bought to open for $0.10 apiece. If the speculator is a "vanilla" option bear, his goal is for A to be sitting south of breakeven at $46.90 (strike minus premium paid) when the options expire on Friday, May 16. On the other hand, it could be a shareholder looking to lock in gains ahead of A's turn in the earnings confessional after the close on Wednesday, May 14.

  • Finally, demand for Nike Inc (NYSE:NKE) short-term options is also on the rise, as the stock's 30-day ATM IV is 9.6% higher at 17.3%. Digging deeper, intraday call volume is running at five times the norm, and more than half of the action has centered on the June 75 call, where about 9,100 contracts have changed hands. Three-quarters of the calls crossed on the ask side, IV is trending higher, and volume has outnumbered open interest -- all signs of buy-to-open activity. The volume-weighted average price (VWAP) of the calls is $0.89, meaning the buyers will reap a reward if NKE is sitting atop $75.89 (strike plus VWAP) at the close on Friday, June 20, when back-month options expire. Risk, meanwhile, is capped at the initial premium paid -- which isn't much, relatively speaking, considering the security's Schaeffer's Volatility Index (SVI) of 16% rests just 1 percentage point from an annual low. At last check, the shares have added 0.3% to flirt with $73.20.


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