Elevated Trading in Rambus Options (RMBS)

Is Rambus Inc. (NASDAQ: RMBS) going to see a resolution to its never-ending patent case sooner than many of us expect?  Options trading is elevated today, and mostly in the Call options rather than the Put options.  Almost all of the activity is in the AUG-2010 Calls as well, at least two to one in favor of the Calls as of 2:00 PM.  There has also been no rolling out on dates that has been seen.

Below is the trading activity we have seen:

As far as the stock volume rather than options volume, shares are up 4.2% at $19.79 on just over 2.3 million shares.  That volume is just now reaching an average day’s trading volume in the stock and the 52-week range is $15.21 to $26.00.

Usually the call options trade around 2,000 contracts on a light day and closer to 5,000 on a normal day.  This implies that more focus is being put in the options arena than the stock arena today.

JON C. OGG

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Major Options Alert in US Airways (LCC)

US Airways Group, Inc. (NYSE: LCC) is the airline nobody wants, or so it seems, when it comes to an airline merger.  What if that notion is wrong?  US Airways shares are at $10.68 and the 52-week range is $2.25 to $10.87.  Exponential gains were available for those who took a stab and held on.  The stock was under $6.00 as recently as February.  There was a very unusual options alert that came off this morning in US Air’s stock via the AUG-2010 CALLS:

CALL$    Volume    OpInt
$9.00    4,447    17,288
$10.00    18,581    23,271
$12.00    34,183    859

What appears to have happened is that a trader locked in significant gains in the $10 strike call options for August.  The $9.00 calls may have been a part, but we did not see those as active until right before posting this notion.

A trader appears to have locked in major upside gains at more than $1.00 and rolled some of the profit proceeds into the higher $12.00 strike call options to keep some potential upside of US Air’s shares keep running.

Despite no major negative earnings reports from the major money center and super-regional banks in America, the Q2-2010 reports seen so far in this July’s earnings season has brought a mixed fanfare for the major US banking giants.

Generally speaking this is not a new speculation trade, but it can be indicative that a bullish trader still has some hope of a deal or further positive development.  Locking in gains and pressing part of the bet to stay positive (as we have just seen)  is still a better indication that taking the money off the table entirely.

JON C. OGG

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Genzyme Active On Continued Buyout Rumors (GENZ)

Genzyme Corp. (NASDAQ: GENZ) has made early gains as more rumors about the company and its potential buyers continues to surface. Shortly after the market closed friday, Sanofi-Aventis (NYSE: SNY) approached the biotech company with the explicit intention of considering purchase. GENZ is up 5.57% to $66 at 8:04 AM EDT. At that time the stock had traded 114 thousand shares volume with an average volume of 3.8 million.

Sanofi-Aventis is not the only Biotech company which has been speculated to have interest in Genzyme. GlaxoSmithKline (NYSE: GSK) and Johnson & Johnson (NYSE: JNJ) are also considered potential suitors.

-Michael B. Sauter

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