Options Activity Alert: FB, NYCB, WPRT

FB – Facebook, Inc. – Trading traffic in upside call options that expire four weeks from now suggest some traders are positioning for shares in Facebook to extend gains in the near term. Shares in FB increased as much as 2.8% in the early going on Thursday to touch an intraday high of $24.84, helped higher in part by positive analyst comments. The Jul 26 ’13 $24.5 strike calls are active for a second session today, with more than 5,500 calls in play versus open interest of 4,121 contracts. Time and sales data suggests the bulk of the $24.5 strike calls were purchased at a premium of $1.10 each during the first 10 minutes of the trading session. The contracts start making money at expiration next month if shares in Facebook rally another 3.0% over today’s high of $24.84 to exceed the effective breakeven point at $25.60. Yesterday, it looks like one or more traders snapped up more than 2,000 of the Jul 26 ’13 $24.5 strike calls for an average premium of $1.00 each. Facebook options are among the most actively traded today as measured by volume, with upwards of 115,000 contracts traded by 11:50 a.m. ET versus the stock’s average daily volume of roughly 141,000 contracts.

NYCB – New York Community Bancorp, Inc. – Options on New York Community Bancorp are more active than usual today, with volume rising to 1,800 contracts during morning trading versus the stock’s average daily volume of around 600 contracts. Shares in NYCB are up 1.15% on the session to stand at $14.04 just before midday in New York. The most actively traded options contracts on NYCB today are the Oct $15 strike calls, with volume of around 1,550 lots changing hands versus previously existing open interest of 654 contracts. Most of the call options appear to have been purchased by one strategist for a premium of $0.15 each. The upside calls may be profitable at expiration in October in the event that NYCB shares rally 8.0% over the current price of $14.04 to top $15.15. The stock last traded above $15.15 back in July of 2011.

WPRT – Westport Innovations, Inc. – Shares in the provider of low-emission engine and fuel system technologies, Westport Innovations, are soaring today, up more than 10% at present to stand at $33.68, the highest level since September of 2012. Traders betting the stock has more room to run in the near term initiated bullish positions in WPRT options in the early going today. Upside calls attracting the most volume thus far in the session are the Jul $32 strike contracts, with roughly 2,250 lots in play versus open interest of 2,025 contracts. It looks like most of the calls were purchased for an average premium of $0.77 apiece in the first hour of trading. The contracts make money at expiration as long as shares in WPRT exceed the average breakeven price of $32.77. Intraday gains in the price of the underlying since this morning has already substantially increased the value of these contracts, with premium on the calls currently up at $2.00 apiece as of 12:10 p.m. ET.

About Caitlin Duffy 373 Articles

Affiliation: Interactive Brokers

Caitlin Duffy joined Interactive Brokers in 2009. In her role as Equity Options Analyst, Caitlin provides daily market commentary; highlighting various options trades, trading patterns and strategies of interest. Through Interactive Broker's webinar program, Ms. Duffy presents a number of educational, options-related events describing the theoretical pricing of options, the option Greeks as well as options strategies.

Interactive Brokers: Interactive Brokers offers direct market access to around 80 electronic global markets from a single account. Successful traders and investors understand that superior technology and lower trading costs can result in greater returns. For 32 years we have been building direct access trading technology that delivers real advantages to professionals worldwide. With consolidated equity capital of US $4.4 billion, IB and its affiliates exceed 1,000,000 trades per day. In addition, our prudent and conservative risk policies make Interactive Brokers a safe haven for your money. Discover some of the reasons why IB, the largest independent US broker/dealer, is the professional traders' and investors' choice.

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