Stock Options Watch: SPLK, GNK, DSX

SPLK – Splunk, Inc. – Options on software and data analysis company, Splunk, Inc., are far more active than usual this morning, with volume topping 4,600 contracts versus the stock’s average daily options volume of 670 contracts, as of 11:20 a.m. ET. Shares in the name are up better than 6% on the day to stand at $31.63, the highest level since October 2012. Traders positioning for shares in the name to extend gains in the near term snapped up January and February expiry call options. Upside calls with one full trading week remaining to expiration looked to the Jan. $30 and $35 strikes, purchasing around 500 and 220 contracts at those striking prices, at average premiums of $0.92 and $0.11 apiece, respectively. Bullish activity spread to the Feb. $35 strike where around 450 calls were purchased for an average premium of $0.41 each, preparing buyers to profit at February expiration in the event that Splunk shares rally another 12% to exceed the average breakeven price of $35.41. But, not all of the activity is in SPLK calls; trading traffic is also robust in the Jan. $30 strike put options. Traders exchanged around 1,300 puts at the Jan. $30 strike versus previously existing open interest of 446 contracts. Put players paid an average premium of $0.42 per contract, and may profit at expiration in the event that Splunk’s shares slip 6.5% from the current price to trade below $29.58.

GNKGenco Shipping & Trading, Ltd.Call options looking for shares in drybulk shipping company, Genco Shipping & Trading, Ltd., to rally substantially during the next five weeks were active this morning as shares in the name moved higher. The stock gained more than 4% during the first 15 minutes of the session, hitting an intraday high of $4.24. However, the stock was unable to hang onto earlier gains, and currently trades down 4% on the day at $3.91 as of 12:40 p.m. in New York. Traders positioning for Genco’s shares to extend the start-of-session rally purchased more than 5,000 calls at the Feb. $5.0 strike for an average premium of $0.14 apiece. Call buyers stand ready to profit at expiration next month should GNK shares jump more than 30% to surpass the average breakeven price of $5.14. Shares in Genco Shipping & Trading last traded above $5.14 in April of 2012.

DSXDiana Shipping, Inc.Similar to shares in drybulk shipping company, Genco, shares in Diana Shipping started Friday’s trading session in positive territory, up as much as 1.7% in the early going to reach an intraday high of $8.76. Gains, however, were short-lived with the stock now down 1.4% to arrive at $8.49 as of 12:35 p.m. ET. Volume in Diana Shipping options this morning was heaviest in the February and March expiry calls. More than 5,500 calls have changed hands at the Feb. $9.0 strike against open interest of just 837 contracts. The contracts were mostly purchased at an average premium of $0.25 each, thus positioning buyers to profit in the event that shares in Diana Shipping climb 9% to top the average breakeven price of $9.25. Like-minded bulls snapped up around 1,100 calls at the Mar. $9.0 strike, paying an average premium of $0.40 per contract.

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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