Tuesday, March 2nd, 2010
Top 3 Stock Option Trades and Plays
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Intrepid Potash, Inc. (NYSE:IPI), ProShares UltraShort Real Estate (NYSE:SRS), and Zions Bancorporation (NASDAQ:ZION) are three interesting stock option trades and plays during today’s session.
Intrepid Potash Traders Buy Call Options
Intrepid Potash, Inc. (IPI, Free Analysis), a producer and marketer of potash and langeinite, saw significant call option volume during today’s session. Approximately 8,000 Jun 40 call options traded for between $0.20 and $0.25 per contract, with a total of 10,200 contracts traded so far during the day, compared to an average of just 1,796 contracts per day.
Earlier this week, Intrepid Potash missed its fourth quarter earnings by 2 cents at $0.09 per share, while its revenues fell 8.1% to $73.1 million versus a $64.3 million consensus. However, the company believes that 2010 sales volumes will rebound and plans to ramp up its mines and plants to operate at more normal production rates.
Also see: Free Introduction to Options Video Tutorial
Traders Bet Big Against Real Estate Industry
ProShares UltraShort Real Estate (SRS, Free Analysis), whose price corresponds to twice the inverse daily performance of the Dow Jones U.S. Real Estate Index, saw significant call option volume during today’s session. Approximately 28,155 calls traded compared to just 2,614 puts, with the Apr 7 calls being the most active this morning.
The move suggests bearish sentiment surrounding the real estate industry, particularly as many are concerned about a collapse in the commercial sector. However, real estate mogul Sam Zell famously began purchasing properties in the residential sector, which many are insisting indicates a bottom in that sector.
Also see: Options Trading 101 Free eBook (PDF)
Zions Bancorporation Traders Appear Bearish
Zions Bancorporation (ZION, Free Analysis), a financial holding company for a total of eight commercial banks with 513 domestic branches, saw significant put options trading during today’s session. Approximately 22,500 Apr 13 puts traded at $0.15 per contract as it appears traders purchased an Apr 17/13 put spread.
The bearish position is setup ahead of the company’s April 18, 2010 first quarter 2010 earnings announcement. Meanwhile, regional banks moved largely higher during today’s session as general economic conditions in the U.S. appear to be moderating. However, several key risks remain, including the reset of many commercial real estate loans that could hit the sector.
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-- Written by Rick Telfur
