Stock Options Watch: GS, TJX, NTGR

GS – Goldman Sachs Group Inc. – Weekly options on Goldman Sachs are active today, with fresh interest on the rise in short-dated calls and puts. Shares in GS are up 0.65% on the session to stand at $159.66 as of 12:30 p.m. ET. Weekly puts with three full trading sessions remaining to expiration attracted substantial volume in the early going. Traders appear to have purchased more than 1,900 of the Aug 23 ’13 $155 strike puts for an average premium of $0.70 apiece this morning, and may profit at expiration this week in the event that Goldman’s shares slump 3.3% from the current price of $159.66 to trade below $154.30. Options traders dabbled in far out of the money weekly puts as well, snapping up around 700 of the Aug 23 ’13 $150 puts at an average premium of $0.27 each and around 310 of the Aug 23 ’13 $145 strike puts for an average premium of $0.13 apiece. The Aug 23 ’13 $160 strike contracts are also changing hands today, with volume in the $160 call and put options exceeding 2,500 contracts and surpassing open interest levels. Overall volume in GS options is approaching 22,200 contracts as of 12:45 p.m. ET, nearing the stock’s average daily options volume of around 24,800 contracts.

TJX – TJX Companies Inc. – Front month call options in play on TJX Companies this morning suggests some traders are positioning for shares in the off-price retailer to extend gains in the near term. The stock is up 6.0% at $53.80 just after midday on Tuesday after the company reported better than expected second-quarter earnings and revenue and raised its full year earnings and sales guidance ahead of the opening bell this morning. Traders looking for the price of TJX shares to push to new all-time highs during the next four weeks appear to be buying the Sep $55 strike calls. More than 800 calls changed hands at the Sep $55 strike during the first half of the session versus open interest of 760 contracts. It looks like most of the volume was purchased in the early going for an average premium of $0.41 each. Call buyers stand ready to profit at expiration next month should shares in TJX Companies rally 3.0% over the current price of $53.80 to exceed a breakeven price and fresh record high of $55.41.

NTGR – Netgear, Inc. – Shares in Netgear are on the rise today, up 1.5% at $29.94 as of midday in New York, but options changing hands on the networking company suggests shares may decline to fresh multi-year lows during the next seven months. The most active options on Netgear today are the Mar ’14 $28 puts, with around 1,200 puts in play versus open interest of 425 contracts. Time and sales data suggests most of the volume was purchased within 15 minutes of the opening bell at a premium of $2.00 apiece. The puts may be profitable at expiration next year should shares in Netgear drop 13% from the current price of $29.94 to trade below the effective breakeven point at $26.00. Shares in NTGR traded down to a 52-week low of $26.82 back in April, but haven’t dipped below $26.00 since October of 2011. The stock is down 25% since the start of 2013.

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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