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Options Radar: J C Penney, Twitter Inc, and OmniVision Technologies

Reviewing notable options activity on J C Penney Company Inc, Twitter Inc, and OmniVision Technologies, Inc.

by 8/14/2014 12:53 PM
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Three names seeing notable option activity today are department store J C Penney Company Inc (NYSE:JCP), microblogging site Twitter Inc (NYSE:TWTR), and semiconductor concern OmniVision Technologies, Inc. (NASDAQ:OVTI). Here's a look at how today's option traders have been placing their bets on JCP, TWTR, and OVTI.

  • J C Penney Company Inc (NYSE:JCP) puts are once again garnering attention ahead of earnings tonight, trading at five times the typical intraday pace. It appears option bears are circling the weekly 8/22 9.50-strike put, with buy-to-open activity detected at the near-the-money strike. By purchasing the puts to open, the buyers are expecting JCP to retreat beneath the strike by the close on Friday, Aug. 22, when the options expire. Most popular, however, is the August 8.50 put, where implied volatility (IV) has shot nearly 50 percentage points higher, and volume has surpassed open interest, hinting at fresh eleventh-hour bets ahead of expiration tomorrow afternoon. At last check, JCP has added 3.4% to flirt with $9.67.

  • Twitter Inc (NYSE:TWTR) is trading 2.2% higher at $45.12, and has seen accelerated call activity. Short-term options are relatively cheap at the moment, as the stock's 30-day at-the-money IV touched a new 52-week low earlier in the session. Digging deeper, it appears one trader is betting on a short-term ceiling for TWTR this week, initiating a short call spread at the August 46 and 46.50 strikes. Specifically, data from the International Securities Exchange (ISE) suggests the 46.50-strike calls were bought to open, and the 46-strike calls were sold to open. The strategist will pocket the initial net credit as long as TWTR remains south of $46 through Friday's close, but the long calls limit the speculator's risk on a move north of $46.50.

  • OmniVision Technologies, Inc. (NASDAQ:OVTI) was last seen 13.3% higher at $27.86, and earlier touched a new three-year high of $28.34, after the firm received a $29-per-share buyout bid from China's Hua Capital Management Ltd., among other investors. Intraday put volume is running at 33 times the norm, and it seems one speculator may have initiated a bull put spread in the December series. Specifically, it looks like the trader sold to open a block of December 26 puts, and bought to open an equal amount of December 25 puts. The strategist can retain the entire credit collected as long as OVTI remains north of $26 through December options expiration, but limited her risk on a move south of $25 by buying the lower-strike puts.


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