Stock Options Watch: ADSK, SODA, CBI

ADSK – Autodesk, Inc. – Shares in the maker of 2D and 3D design and engineering software are down more than 4.0% today at $35.01 as of 11:40 a.m. ET and options activity on the stock this morning suggests some traders are bracing for the price of the underlying to extend losses during the next couple of weeks. Trading traffic in Autodesk options is heaviest at the Aug $34 strike where upwards of 2,900 puts have changed hands against open interest of 757 contracts. Time and sales data suggests most of the volume was purchased during morning trading for an average premium of $0.33 apiece. Put buyers may profit at expiration next month in the event that ADSK shares slide 3.8% from the current price of $35.01 to breach the average breakeven point on the downside at $33.67. The August expiry put options were also trading heavily during Tuesday’s session. It looks like a roughly 1,900-lot Aug $33/$35 put spread was purchased yesterday at an average net cost of $0.25 per contract. The bearish spread may generate maximum potential profits of $1.75 per contract if shares in Autodesk drop 5.7% to $33.00 by August expiration. The cost of initiating the same Aug $33/$35 put spread has roughly doubled overnight to $0.60 per spread as of the time of this writing.

SODA – Sodastream International Ltd. – Bullish options are active on Sodastream today following the company’s better than expected second-quarter earnings report released ahead of the open this morning. Shares in the name jumped more than 16% to $67.81 after the company raised its full year revenue forecast and posted higher than estimated second-quarter results. Traders positioning for shares in SODA to continue higher during the next couple of sessions snapped up weekly calls on the stock. More than 2,200 calls changed hands at the Aug 02 ’13 $67.5 strike versus open interest of 869 contracts by midday. It looks like most of the volume was purchased for an average premium of $1.00 apiece. Traders also homed in on the Aug 02 ’13 $70 strike calls, trading more than 1,300 lots and buying much of the volume for an average premium of $0.42 per contract. Buyers of the $67.5 and $70 strike weekly call options stand ready to profit at expiration should shares in the name rally another 1.0% and 4.0% over today’s high of $67.81 to top average breakeven points at $68.50 and $70.42, respectively.

CBI – Chicago Bridge & Iron Co. – Options on engineering and construction company, Chicago Bridge & Iron Co., are more active than usual today with shares in the name up 1.5% at $60.58 on the heels of better than expected second-quarter earnings released after the closing bell on Tuesday. Overall options volume of roughly 12,000 contracts as of midday in New York is substantial versus the stock’s average daily volume of around 1,600 contracts. The bulk of the volume is in upside calls, driving the call/put ratio above 9.5 in early afternoon trading. Activity in front month call options this morning suggests one or more traders are positioning for the price of the underlying to continue higher in the near term. The most traded options on CBI today are the Aug $62.5 strike calls, with more than 5,500 lots in play thus far in the session. It looks like one trader purchased most of the $62.5 calls at a premium of $0.50 per contract. The position starts making money if shares in Chicago Bridge & Iron Co. rally another 4.0% to top the average breakeven price of $63.00 by August expiration.

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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