Stock Options Watch: DAN, LNKD, PERI

DAN – Dana Holding Corporation – Bullish options are changing hands on Dana Holding Corp today, with shares in the name up as much as 3.5% on the day to a new 52-week high of $22.67. The auto parts maker this morning announced it has entered into a $200 million accelerated share repurchase agreement, after previously increasing its buyback program to $1 billion some six weeks prior. The most actively traded options contracts on DAN today are the Aug $22 strike calls, with volume topping 1,000 lots versus open interest of 252 contracts. Time and sales data suggests one trader purchased most of the calls at a premium of $0.30 apiece within the first few minutes of the opening bell this morning. Intraday gains in the price of the underlying shares has more than doubled the value of the position, lifting the asking price on the $22 calls up to $0.85 each as of 11:50 a.m. ET. Dana Holding Corp. is scheduled to participate in the J.P. Morgan Auto Conference in New York tomorrow morning.

LNKD – LinkedIn Corp. – Shares in LinkedIn are up sharply on Monday, trading up 3.0% during morning trading to a record high of $239.90, after the stock was raised to ‘buy’ from ‘hold’ with a 12-month target price of $280.00 at Needham & Co. Trading traffic in LinkedIn options expiring in October suggests some strategists are positioning for shares to continue higher during the next couple of months. More than 600 of the Oct $280 calls changed hands this morning against open interest of 72 contracts. It looks like most of the calls were purchased, with some of the contracts picked up for as much as $3.10 apiece. Call buyers stand ready to profit at October expiration in the event that LNKD shares rally another 18% over today’s high of $239.90 to exceed a breakeven price of $283.10.

PERI – Perion Network Ltd. – Options on digital media company, Perion Network Ltd., are more active than usual today, with volume topping 3,700 contracts during the first half of the session versus the stock’s average daily volume of around 650 contracts. Trading in Perion put options is outpacing that of calls, with the put/call ratio hovering around 2.5 as of 12:20 p.m. ET. Shares in Perion are down sharply today, off 10.4% at $10.80 in early-afternoon trading, after the company posted lower than expected second-quarter sales ahead of the open and forecast third-quarter revenue below analyst estimates. Put selling on the stock, however, suggests one or more traders expect the price of the underlying to exceed $10.00 through January 2014 expiration. It looks like roughly 1,000 of the Jan ’14 $10 puts were sold this morning for a premium of $0.95 apiece. Put sellers keep the full amount of premium as long as shares in PERI settle above $10.00 at expiration next year. Time and sales data from last Thursday suggests one trader sold around 400 of the Jan ’14 $10 puts last week to pocket premium of $0.75 per contract. Perion is scheduled to present at the Oppenheimer Annual Technology, Internet & Communications Conference in Boston tomorrow.

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.

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