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Full Court Press with Doctor J

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Slam Dunk!

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Editor's Note: For more of Dr. J's work excellent work, click here.

  • eBay (EBAY) OUTLOOK: Keep in mind that last earnings report the world's biggest auction site fell by nearly 20%, falling from over $100 to $91 in the after-hours session and opening around $80 the next day. So far today, EBAY overall volume is just over 44,000 contract on the call side versus 20,000 on the put side. With 21,000 calls at the May 35 strike trading and just 7,500 of the May 30 puts changing hands, it is pretty clear big money is betting that the odds favor a bullish report tonight. That or a relief rally after this big slide.

  • General Motors (GM) is down $.20 to $25.89 and $7 are being spent on puts for each dollar spent on calls. I show 11,000 calls trading against 59,000 puts.

    January 2007 10 puts are the most active put strike, where 7,700 are again traded, most probably by those with exposure to GM bonds, as such a very far out-the-money put wouldn't be a trader's choice for a short or even protective position.

  • As Intel (INTC) trades up $.66 to $23.29 the calls are moving up and the puts moving down, which is what you'd expect. What you might not expect is that with INTC volatility falls to 20% from 30% last night the calls are being bid by institutions rather than being hit, which is moderately bullish. At mid-session I show 65,000 calls and 30,000 puts changing hands.

  • Valero (VLO) continues its recovery, but to paraphrase Betty Davis, its been a bumpy ride! Right after the API report VLO hit a low of $72.75, but quickly rebounded to over $76.75 as buyers flooded back into a host of oil names. Thus far I show 21,000 calls against 6,200 puts and my dollar-weighted index is even stronger coming in at over 5:1 on the call side.

  • Juniper (JNPR) is racing higher as their revenue more than doubled to $449 million. The stock moved up nearly 10%, trading a high of $23.48 before easing to $23.22 and the now in-the-money May 22.50 calls are up 114% on the session, gaining $.80 to $1.15.

  • AIG volatility is coming in, that is to say dropping, as the insurer is back and forth across the unchanged line. I'm showing nearly 9,000 of the August 55 calls trading, which is notably bigger volume than we've seen over the past few sessions at that strike. That also makes up over 52% of AIG's call volume of 22,000 contracts against 8,100 puts.

  • IWM trades 3,200 calls against 29,000 puts and the dollar-weighted index is likewise favoring the puts by better than 9:1. Even though the Russell ETF is trading down $.31 to $117.99, most of the puts are trading lower as institutional traders are selling the pumped up premiums.

  • Nearly 16,000 of the Apple (AAPL) July 45 calls make up about a third of AAPL call volume today. Overall AAPL trades 44,000 calls against 7,000 puts, but those July 45 calls are being accumulated by someone pretty big, as it's strange to see so many trading on the offer when AAPL is limping along the unchanged area for the session.



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Positions in INTC, VLO and AAPL
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