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Options Radar: AOL, Inc., RetailMeNot Inc, and Hartford Financial

Reviewing notable options activity for AOL, Inc., RetailMeNot Inc, and Hartford Financial Services Group Inc

by 8/5/2014 1:17 PM
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Three stocks seeing notable options activity today are online media issue AOL, Inc. (NYSE:AOL), coupon giant RetailMeNot Inc (NASDAQ:SALE), and insurance provider Hartford Financial Services Group Inc (NYSE:HIG). Here's a look at how today's options traders have been placing their bets on AOL, SALE, and HIG.

  • As the company prepares to report second-quarter earnings before tomorrow's opening bell, call volume on AOL has jumped to 13 times the daily average. So far, 4,460 calls have changed hands on AOL, Inc., with 2,611 of those traded at the stock's September 41 call. Open interest on this back-month call totals just 20 contracts, and -- with 95% of the intraday volume changing hand at the ask price -- it looks like new bullish bets are being opened on AOL at this out-of-the-money strike. At last check, AOL is up 0.7% at $39.50, and the positive momentum could continue after Wednesday morning's announcement. The firm has matched or beaten bottom-line estimates in six of the last seven quarters, with the stock boasting an average three-day post-earnings gain of 2.5%.

  • SALE has plummeted 26% today to trade at $18.71 -- and tagged a record low of $18.36 just moments ago -- with traders panning the company's disappointing second-quarter earnings and lackluster guidance. Put players were active ahead of the quarterly results, and today's short-selling restriction on shares of RetailMeNot Inc has once again driven bears into the options pits. Put volume has ramped up to 23 times the expected intraday level, and new pessimistic positions are being opened at SALE's newly in-the-money October 20 put. More than 3,000 contracts have changed hands at this strike, with the puts trading at a volume-weighted average price of $2.45.

  • Roughly 11,000 puts have traded so far on HIG, dwarfing the stock's average single-day volume of fewer than 1,200 contracts. A massive transaction involving 10,000 September 34 puts accounted for most of the activity, and this block crossed the tape just minutes before 450,000 Hartford Financial Services Group Inc shares. At the time of these linked trades, delta on HIG's September 34 puts was hovering around negative 0.46, suggesting there's a delta-hedging play in the works today. On the charts, HIG is off 0.6% at $34.12, widening its year-to-date loss to 5.8%.


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