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Option Clips: Himax Technologies, IBM, and Galectin Therapeutics

Reviewing notable options activity on Himax Technologies, Inc. (ADR), International Business Machines Corp., and Galectin Therapeutics Inc.

by 3/25/2014 1:22 PM
Stocks quoted in this article:

Three equities generating buzz on StockTwits today are chipmaker Himax Technologies, Inc. (ADR) (NASDAQ:HIMX), big-cap tech concern International Business Machines Corp. (NYSE:IBM), and biotech issue Galectin Therapeutics Inc. (NASDAQ:GALT). Here's a look at how traders have been aligning their speculative bets today.

  • Himax Technologies, Inc. (ADR) (NASDAQ:HIMX) has plunged 15.1% to $11.36 today, after BofA-Merrill Lynch downgraded the stock to "underperform" from "buy." Specifically, the analysts expressed concern about the progress -- or lack thereof -- of HIMX's Liquid Crystal on Silicon (LCoS) display technology. Against this backdrop, HIMX has landed on the short-sale restricted (SSR) list, sending bears to the options pits. In fact, the equity's 30-day at-the-money (ATM) implied volatility (IV) is 9% higher at 64.1%, reflecting a growing demand for short-term contracts. So far today, roughly 6,700 puts have changed hands on the stock -- about five times the norm. Digging deeper, it appears some traders see single-digit territory on the horizon for HIMX, buying to open the April 10 put.

  • International Business Machines Corp. (NYSE:IBM) is 2.2% higher at $192.35, amid rumors of a possible bid for Atlanta-based marketing automation firm Silverpop. Furthermore, Big Blue announced a new partnership with Pitney Bowes to provide hybrid cloud location services. IBM's 30-day ATM IV is now 5.5% higher at 20.6% -- its loftiest level since January -- with overall options volume trading at three times the norm. Short-term speculators are circling the weekly 3/28 190-strike put and 195-strike call, which have both seen apparent buy-to-open activity. However, most active is the April 195 call, where nearly 5,400 contracts have traded, primarily at the bid price. Plus, IV is trending higher, suggesting some speculators are selling to open the calls to bet on a short-term ceiling for IBM.

  • Finally, Galectin Therapeutics Inc. (NASDAQ:GALT) has skyrocketed 17.3% to $17.11, after the firm said it will unveil the results of an trial of GR-MD-02, its fatty liver disease treatment, on Monday, March 31. The equity now finds itself on the SSR list, and options traders are picking up puts at 15 times the normal rate. The stock's 30-day ATM IV has shot 34.9% higher to an all-time high of 177.3%, and GALT's out-of-the-money April 10 put is most popular among option buyers. More than three-quarters of the round-number puts traded on the ask side, IV is 66 percentage points higher, and volume has surpassed open interest at the strike. However, considering GALT has more than doubled in 2014, it's possible that some of the long put activity is attributable to shareholders looking to lock in profits in the event of negative drug news next week.

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