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Options Radar: Herbalife Ltd., 3D Systems, and Tractor Supply Company

Reviewing notable options activity on Herbalife Ltd., 3D Systems Corporation, and Tractor Supply Company

by 8/27/2014 1:23 PM
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Three names seeing notable options activity today include nutritional supplement specialist Herbalife Ltd. (NYSE:HLF), 3-D printing name 3D Systems Corporation (NYSE:DDD), and farm equipment retailer Tractor Supply Company (NASDAQ:TSCO). Here's a look at how today's options traders have been placing their bets on HLF, DDD, and TSCO.

  • Herbalife Ltd. (NYSE:HLF) soared to an intraday high of $52.15 earlier, sparked by speculation surrounding Carl Icahn's cryptic "BIG deal" tweet. At last check, though, the stock was up 2.9% at $50.92. In HLF's options pits, calls are trading at two times the average intraday pace, and the equity's 30-day at-the-money (ATM) implied volatility (IV) is 11.1% higher at 51.4%, signaling increased interest in short-term contracts. Specifically, buy-to-open activity has been detected at HLF's September 55 and weekly 9/5 51.50-strike calls, as traders roll the dice on extended gains for the security.

  • 3D Systems Corporation (NYSE:DDD) announced a new advisory board for its high school education initiative, which includes members from industry heavyweights Intel Corporation (NASDAQ:INTC) and General Electric Company (NYSE:GE), among others. In the wake of the announcement, DDD has soared 2.5% to $52.73, and is trading north of its 80-day moving average for the first time since late July. Amid this move higher, calls are trading at a faster-than-usual clip on DDD, with speculators buying to open the equity's weekly 9/5 54-strike call. Meanwhile, DDD's 30-day ATM IV tumbled to a fresh 52-week low earlier, but was last seen up fractionally at 38.7%.

  • Tractor Supply Company (NASDAQ:TSCO) has rallied almost 16% from its July 10 annual low of $57.20, and, as such, the stock's 14-day Relative Strength Index (RSI) of 72 is signaling a move into overbought territory. It's no surprise, then, to see the equity down 0.7% in today's session to trade at $66.31. Option traders don't expect this negative price action to last, though. Specifically, 81% of the 4,442 puts traded today -- 19 times the intraday average -- have crossed at the September 60 strike, and the majority of the action has occurred on the bid side, signaling seller-driven activity. Volume outstrips open interest here, pointing to the initiation of new short positions. Simply stated, these put writers expect TSCO to maintain its perch atop this round-number mark through the close on Friday, Sept. 19, when front-month options expire.

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