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Option Clips: SodaStream International, Starbucks, and Zynga

Reviewing notable options activity on SodaStream International Ltd, Starbucks Corporation, and Zynga Inc

by 4/23/2014 2:16 PM
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Two equities generating buzz on StockTwits today are carbonated beverage provider SodaStream International Ltd (NASDAQ:SODA) and java giant Starbucks Corporation (NASDAQ:SBUX). Meanwhile, social networking concern Zynga Inc (NASDAQ:ZNGA) is seeing some pre-earnings options action. Here's a look at how traders have been aligning their speculative bets today.

  • SodaStream International Ltd (NASDAQ:SODA) is 14.2% higher at $46.10, amid reports that Starbucks Corporation is in advanced talks to acquire a 10% stake in the firm. Overall options volume is running at six times the normal intraday pace, with calls the options of choice. Roughly 23,000 SODA calls have changed hands, compared to 18,000 puts. Digging deeper, it appears speculators are buying to open the weekly 4/25 45-strike call, amid hopes that SODA will extend its journey north of $45 through the end of the week, which represents the option's lifetime.

  • Starbucks Corporation (NASDAQ:SBUX), on the other hand, has tumbled 0.7% on the news, and was last seen flirting with $70.67. The stock's 30-day at-the-money (ATM) implied volatility (IV) is 3.1% higher at 26.1%, with demand for short-term options elevated ahead of the company's turn in the earnings confessional tomorrow night. However, calls have a slight advantage over puts, with roughly 5,400 of the former traded, compared to fewer than 4,100 of the latter. In fact, the most popular option thus far is the May 77.50 call, which expire at the close on Friday, May 16.

  • Finally, Zynga Inc (NASDAQ:ZNGA) has surrendered 2.4% ahead of tonight's earnings release, and was last seen around $4.47. Puts remain popular, with about 18,000 contracts exchanged -- a 78% mark-up to the stock's intraday average. Furthermore, the stock's 30-day ATM IV is 5.8% higher at 76.4%, and its Schaeffer's Volatility Index (SVI) of 74% stands higher than 62% of all other readings from the past year, suggesting ZNGA's short-term options are slightly more expensive than usual, from a volatility standpoint. Digging deeper, the security's weekly 4/25 4-strike put is most popular today, with close to 7,200 contracts exchanged. Two-thirds of the puts traded on the ask side, and IV has skyrocketed, hinting at newly bought bearish bets. The puts will be in the money if ZNGA is sitting south of $4 at options expiration Friday night, but the option's delta of negative 0.18 reflects a less than 1-in-5 shot of an in-the-money finish.


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