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Bears Bombard Finish Line Inc (FINL) During Post-Earnings Collapse

Finish Line Inc put volume has jumped to 21 times the intraday average

by 12/19/2014 2:22 PM
Stocks quoted in this article:

Finish Line Inc (NASDAQ:FINL) is taking it on the chin today, after the company posted a surprise third-quarter loss, and slashed its fiscal 2015 adjusted earnings outlook. As such, the stock has plunged 20.4% to trade at $23.02 -- second only to ImmunoGen, Inc. (NASDAQ:IMGN) as the Nasdaq's biggest laggard -- and earlier hit a new 52-week low of $22.61. What's more, FINL has earned a place on the short-sale restricted list, sending bearish bettors flocking to the equity's options pits.

Specifically, puts are trading at 21 times the average intraday pace, with buy-to-open activity detected at the equity's January 2015 22.50 strike. By initiating these long puts, traders expect FINL to extend its slide into annual-low territory over the next four weeks.

Going forward, the stock could encounter another wave of selling pressure, should any brokerage firms follow in the footsteps of BofA-Merrill Lynch and Deutsche Bank, which both issued bearish notes on the security earlier. Of the 15 analysts covering the shares, seven maintain a "strong buy" rating, with not a single "sell" to be found. Plus, the consensus 12-month price target of $29.79 stands at a steep 29.4% premium to current trading levels. Simply stated, the door is wide open for another round of downgrades and/or price-target cuts for Finish Line Inc (NASDAQ:FINL).


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Sony Corp (ADR) (SNE) Attacked by North Korea, Option Bears

The FBI confirmed Sony Corp (ADR) was the victim of North Korean hacking

by 12/19/2014 1:48 PM
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It's official: Sony Corp (ADR) (NYSE:SNE) was hacked by North Korea. The FBI earlier confirmed the culprits behind the cyberattack, which was motivated by a desire to derail Sony Pictures Entertainment's movie, "The Interview," and President Barack Obama is expected to make a statement soon. Meanwhile, put traders are flocking to the equity's options pits, with the contracts crossing at nearly double the usual intraday rate.

Taking a quick step back, SNE is off 2.8% this afternoon to hover around $20.55. Option bears are rolling the dice on extended losses, buying to open the July 20 put -- the stock's most active strike. In so doing, these traders are merely reflecting the broader skepticism present in the options pits. Specifically, SNE's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 6.45 ranks at the top of its annual range, suggesting speculators have never favored long puts over calls more strongly in the last year.

Turning to the charts, despite Sony Corp's (ADR) (NYSE:SNE) intraday retreat, the shares are still sitting on a year-to-date lead of nearly 19%. What's more, today's losses are being contained by the security's 10-day moving average.


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ISIS Pharmaceuticals, Inc. (ISIS) Traders Take Heed to Cramer

ISIS Pharmaceuticals, Inc. calls are flying off the shelves today

by 12/19/2014 1:24 PM
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ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) is in rally mode today -- up 8.8% at $64.79, and earlier topping out at a record peak of $67.12 -- following bullish comments made by CNBC's Jim Cramer. Against this backdrop, calls are trading at eight times the average intraday clip, and per the equity's 30-day at-the-money implied volatility, which is up 6.5% to 59%, short-term contracts are in high demand.

In the soon-to-be front-month series, traders are targeting the January 2015 65- and 70-strike calls. Drilling down, there appears to be some buy-to-open activity here, as traders roll the dice on a bigger run into uncharted territory over the next four weeks.

From a wider sentiment perspective, options traders have shown a growing affinity for puts over calls among options slated to expire in three months or less. In fact, since Nov. 21 -- when November options expired -- the stock's Schaeffer's put/call open interest ratio (SOIR) has edged up to 0.88 from 0.82. What's more, the current ratio ranks in the 64th annual percentile, meaning short-term speculators are more put-heavy than usual toward the shares.

Thanks to today's surge, ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) is now boasting an impressive 63% year-to-date lead. An extended run into uncharted territory could prompt another round of upbeat analyst attention. At present, one-third of those covering the shares maintain a "hold" or "sell" suggestion, while the consensus 12-month price target of $55.90 stands at a discount to current trading levels.


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Option Bears Charge These 2 Slumping Solar Stocks

Put buyers targeted JA Solar Holdings Co., Ltd. (ADR) and Trina Solar Limited (ADR) yesterday

by 12/19/2014 10:40 AM
Stocks quoted in this article:

While North American solar stocks rallied yesterday, their China-based peers -- including JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO) and Trina Solar Limited (ADR) (NYSE:TSL) -- reeled, possibly due to recent tariff news. Specifically, JASO dropped 3.8%, while TSL skidded to a 7.2% loss. Elsewhere, these stocks' options pits were busy, as the sell-off lured a fresh crop of bearish bettors.

Diving right in, JASO puts crossed at nearly triple the expected single-session rate, with buy-to-open activity detected at the January 2015 8-strike put. Similarly, TSL puts traded at eight times the norm, and speculators may have initiated long positions at the January 2016 5- and 8-strike puts. In other words, Thursday's traders expect the solar securities to move steadily lower through the respective expiration dates.

This preference for puts over calls echoes the withstanding trend for both equities. JASO's 10-day put/call volume ratio of 1.32 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 89th percentile of its annual range. Even more extreme is TSL's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.71, which outstrips all comparable readings from the previous 52 weeks.

Looking at today's charts, both stocks have pared a portion of yesterday's losses. JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO) has rallied 2.9% to trade at $7.89, while Trina Solar Limited (ADR) (NYSE:TSL) has tacked on 4% to hover near $8.05. Nevertheless, from a longer-term perspective, the equities are still a respective 14% and 41% lower year-to-date.


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King Digital Entertainment PLC (KING) Bulls See a Strong Start to 2015

King Digital Entertainment PLC's January 2015 20.54-strike call was bought to open yesterday

by 12/19/2014 10:36 AM
Stocks quoted in this article:

Since hitting a record low of $10.68 in mid-October, King Digital Entertainment PLC (NYSE:KING) has bounced 53% to trade at $16.33. Against this backdrop, option traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 14.53 calls for every put over the past 50 sessions.

This call-skewed trend was witnessed on Thursday, where the contracts traded at five times the daily average, and outpaced puts by a nearly 22-to-1 margin. Option bulls set their sights on the stock's January 2015 20.54-strike call, initiating new long positions to bet on an extended rally for the shares. Considering KING hasn't traded north of the strike since late July, delta on the call is docked at 0.19, suggesting a less than 1-in-5 chance of an in-the-money finish at January options expiration.

Outside of the options pits, sentiment toward the gaming issue isn't so sanguine. Short interest, for example, accounts for 18.4% of the stock's available float. In light of this, a portion of the recent call buying -- particularly at out-of-the-money strikes -- could be at the hands of short sellers hedging against any additional upside for King Digital Entertainment PLC (NYSE:KING).


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