Option Activity Alert: Blue Coat Systems, Schlumberger

BCSI – Blue Coat Systems, Inc. – Renewed takeover speculation on the provider of wide area network optimization software pushed BCSI shares up as much as 6.30% in the first half of the trading session to an intraday high of $24.77. Bullish options traders were quick to covet near-term call options on the stock in case this round of chatter from the rumor mill has legs to stand on. Investors hoping to see Blue Coat’s shares continue higher ahead of expiration day next month picked up some 1,100 calls at the October $25 strike for an average premium of $0.75 apiece. Trading traffic was heaviest, however, at the higher October $26 strike where more than 8,100 calls changed hands by 12:05 pm ET. It looks like the majority of those contracts, approximately 5,300 of them, were purchased at an average premium of $0.44 a-pop. Call buyers are poised to profit should shares rally another 6.75% over today’s high of $24.77 to surpass the average breakeven point to the upside at $26.44 by October expiration. The fresh bout of takeover speculation helped the stock’s overall reading of options implied volatility rise 13.53% to 53.55% earlier in the trading session. Volatility is currently up a lesser 6.6% to 50.28% as of 12:10 pm ET.

SLB – Schlumberger, Ltd. – Near-term bullish players are piling into in- and out-of-the-money call options on the provider of oil equipment and services today with the value of its shares priced 2.25% higher at $61.64 as of 12:20 pm ET. Investors looking for Schlumberger to extend gains through expiration day next month purchased approximately 5,000 in-the-money calls at the October $60 strike at an average premium of $1.97 apiece. Call buyers at this strike make money if SLB shares trade above $61.97 ahead of October expiration. Optimism spread to the higher October $62.5 strike where some 4,300 call options were picked up at an average premium of $0.76 each. Investors long the calls stand ready to accumulate profits should the price of the underlying stock increase 2.60% over the current price of $61.64 to exceed the average breakeven point at $63.26 by expiration day. Schlumberger’s shares have traded below $63.26 since August 5, 2010.

About Andrew Wilkinson 1023 Articles

Affiliation: Interactive Brokers

Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.

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