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
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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.
 

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