Options Radar: Infinera Corp., Under Armour Inc, and AK Steel Holding

Reviewing notable options activity on Infinera Corp., Under Armour Inc, and AK Steel Holding Corporation

Oct 23, 2014 at 12:00 PM
facebook twitter linkedin

Three stocks seeing notable options activity today are optical networking equipment provider Infinera Corp. (NASDAQ:INFN), athletic apparel maker Under Armour Inc (NYSE:UA), and industrial metal concern AK Steel Holding Corporation (NYSE:AKS). Here's a look at how speculators have been placing their bets on INFN, UA, and AKS.

  • A strong quarterly showing from Infinera Corp. (NASDAQ:INFN) helped send shares to a fresh six-year peak of $13.41 earlier, with INFN last seen 26.3% higher at $13.39. Adding to the bullish buzz is a round of brokerage notes, including a price-target hike to $14 from $13 at Goldman Sachs, and a spot on the brokerage firm's coveted "Conviction Buy" list. In the options pits, calls are trading at 24 times the average intraday rate, and are outpacing puts by a nearly 12-to-1 margin. A number of speculators are betting on more upside for INFN over the next several months, by buying to open the equity's December 12 call and January 2015 13-strike call.

  • Also trading higher in the wake of its quarterly results is Under Armour Inc (NYSE:UA), which is up 0.2% at $66.18. Today's positive price action is just more of the same for UA, which has rallied nearly 52% in 2014, and tagged a record peak of $73.42 as recently as Sept. 8. Following this morning's scheduled event, the stock's 30-day at-the-money implied volatility has plunged 32.1% to 32.2%. This sharp drop in volatility may be what is prompting speculators to close out their short November 66 puts at a profit. In fact, a number of these positions were sold to open yesterday for a volume-weighted price (VWAP) of $3.04, and today are being bought to close at a VWAP of $2.26.

  • AK Steel Holding Corporation (NYSE:AKS) is following in the bullish footsteps of the broader equities market today, and was 5.5% higher at last check to linger near $7.13. The equity has put in a solid showing in recent sessions -- thanks to an upbeat outlook from Nomura last Friday -- and is on pace to notch a nearly 13.8% week-to-date gain. Options traders think this momentum will continue over the next four weeks -- a time frame which includes the company's early morning earnings report on Tuesday, Nov. 4. Specifically, 56% of AKS' call volume this morning has centered at the November 7 strike, where it appears the majority of the positions are being bought to open for a VWAP of $0.55.

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Common mistakes options traders make


Special Offers from Schaeffer's Trading Partners