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Options Radar: Michael Kors, Buffalo Wild Wings, and Windstream

Reviewing notable options activity on Michael Kors Holdings Ltd, Buffalo Wild Wings, and Windstream Holdings, Inc.

by 7/29/2014 2:04 PM
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Three stocks seeing notable options activity today are apparel issue Michael Kors Holdings Ltd (NYSE:KORS), restaurateur Buffalo Wild Wings (NASDAQ:BWLD), and telecom concern Windstream Holdings, Inc. (NASDAQ:WIN). Here's a look at how today's options traders have been placing their bets on KORS, BWLD, and WIN.

  • The recent fall from grace for KORS has been well documented, and on the charts, the shares are off 17% from their Feb. 25 record peak of $101.04. In today's session, the stock is extending this slide, off 0.5% to churn near $83.82. In spite of this, call volume is running at nearly two times the average intraday level, with one bull in particular keeping the faith on a near-term bounce. The two most active KORS options today are the weekly 8/1 85-strike and the September 90 calls, and Trade-Alert speculates the former are being sold to close, while the latter are being bought to open. In other words, this speculator may possibly be rolling her bullish bet on Michael Kors Holdings Ltd up and out. Looking ahead, the company will report fiscal first-quarter earnings next Monday morning, which falls within the lifetime of the newly initiated September calls.

  • Ahead of tonight's turn in the earnings confessional, BWLD has tacked on 1% to trade at $166.34 -- and earlier came within striking distance of its record peak of $167.36, tagged on July 1. Meanwhile, in Buffalo Wild Wings' options pits, overall volume has soared to nearly five times what's typically seen at this point in the day. Premium on these pre-earnings bets is on the rise, per the security's 30-day at-the-money (ATM) implied volatility (IV), which is up 5.4% to 41.6% -- in the 92nd percentile of its annual range. Drilling down, it appears new positions are being opened at the in-the-money August 165 call and the out-of-the-money August 160 put.

  • WIN soared to a three-year high of $13.30 today, after the company announced plans to spin off a portion of its telecommunications network into a publically traded real estate investment trust (REIT). At last check, though, the security was still enjoying a 13.5% lead to trade at $11.96. Against this backdrop, speculators are flooding the equity's options pits, with overall volume running at 28 times the average intraday pace. Traders, in particular, are showing a preference for short-term contracts, per Windstream Holdings, Inc.'s 30-day ATM IV, which is up 35.3% to 34.3% -- in annual-high territory. Among specific strikes, fresh positions are being created at WIN's August 13 and September 12 calls. On the fundamental front, the company will report second-quarter earnings before the open next Thursday, Aug. 7.


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