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Options Radar: Burger King Worldwide Inc, Autohome Inc, and DSW Inc.

Reviewing notable options activity on Burger King Worldwide Inc, Autohome Inc (ADR), and DSW Inc.

by 8/25/2014 1:00 PM
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Three names seeing notable option activity today are fast-food chain Burger King Worldwide Inc (NYSE:BKW), Beijing-based car issue Autohome Inc (ADR) (NYSE:ATHM), and footwear retailer DSW Inc. (NYSE:DSW). Here's a look at how today's option traders have been placing their bets on BKW, ATHM, and DSW.

  • Burger King Worldwide Inc (NYSE:BKW) is up 19.9% today at $32.50, and earlier tagged a new record peak of $32.85, in the wake of some well-received M&A news. In the stock's options pits, overall volume has soared to 50 times what's typically seen at this point in the day. Amid this accelerated demand, BKW's 30-day at-the-money (ATM) implied volatility (IV) has surged 106.4% to 33.8% -- a fresh 52-week peak. Drilling down, buy-to-open activity has been detected at the stock's January 2015 33-strike call, as traders gamble on an extended rally.

  • Autohome Inc (ADR) (NYSE:ATHM) hit a fresh record peak of its own today -- topping out at the $54.71 mark -- amid encouraging reports of ad-sales growth. At last check, though, the stock was up 7.4% at $53.20, bringing its year-to-date advance to roughly 45%. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day call/put volume ratio of 2.40 shows a preference for calls over puts of late. It's no different in today's trading, either, with calls outpacing puts by a nearly 3-to-1 margin. Short-term contracts are in high demand, per the equity's 30-day ATM IV, which is 16.3% higher at 62.5%.

  • Unlike its sector peers Foot Locker, Inc. (NYSE:FL) and Skechers USA Inc (NYSE:SKX) -- which hit fresh record peaks earlier in the wake of bullish brokerage notes -- DSW Inc. (NYSE:DSW) is in the red today, down 1.1% to trade at $28.08. Option traders are staying optimistic, though, ahead of the company's early morning turn in the earnings confessional tomorrow, scooping up calls at a rate 11 times the intraday average. Specifically, speculators are buying to open September 30 calls, hoping the stock will reclaim its perch atop $30 by the close on Friday, Sept. 19 -- when front-month options expire. The last time DSW traded north of this round-number mark was on May 27 -- the day before taking a 27.4% earnings-induced plunge.

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