Unusual Options Volume Spikes on Friday (NLY, COCO, HPQ, PCS, NTAP, NFLX, PHM, SUN)

Friday had some incredibly wild options moves in select names on a standout basis.  We tracked some very unique and strange moves in options of Annaly Capital Management, Inc. (NYSE: NLY), Corinthian Colleges Inc. (NASDAQ: COCO), Hewlett-Packard Company (NYSE: HPQ), MetroPCS Communications, Inc. (NYSE: PCS), NetApp Inc. (NASDAQ: NTAP), Netflix, Inc. (NASDAQ: NFLX), PulteGroup, Inc. (NYSE: PHM), and Sunoco Inc. (NYSE: SUN).

Annaly Capital Management, Inc. (NYSE: NLY) saw unusual put options trading volume.  It looks like about 5-times normal trading volume.  Normally we’d say this is downside protection, but it may have been in part due to rolling expirations from August to September.  Over 16,000 were in the closest 3 August puts, and there were more than 20,000 of the September puts.

Corinthian Colleges Inc. (NASDAQ: COCO) gave a crazy read ahead of earnings next week.  Of the AUG $6 PUTS, we saw 8,262 contracts trade versus an open interest of only 868 contracts.  These expire next Friday and at a $6.66 close and a new 52-week range of $6.64 to $20.29, it seems like a serious bet was placed for an otherwise quiet option pattern.

Hewlett-Packard Company (NYSE: HPQ) is still seeing significant options trading.  Some was roll date trading, but The open interest for the $42 strike and $45 strike grew by more than half each today after 15,347 and 13709 contracts traded in each respectively.

MetroPCS Communications, Inc. (NYSE: PCS) saw some unusual activity out in the speculative longer-dated calls. There were over 3,000 of the JAN-2011 $10 CALLS versus an open interest of 1,155 contracts.

NetApp Inc. (NASDAQ: NTAP) gave an options flag today… earnings are next week.  The AUG $38 CALLS saw 4,206 contracts versus the open interest of 2,119 contracts.  There were more than 9,000 more in AUG strike prices in the CALLS.  There were also 4,080 of the AUG $38 PUTS versus an open interest of 2,321 contracts.  Someone’s playing the straddle for earnings.  We also saw some 9.875 of the September $40 CALLS trade versus an open interest of 4,395 contracts.

Netflix, Inc. (NASDAQ: NFLX) is not as strong as we saw this week in speculation, but one thing is obvious… The elevated put and call options trading is continuing and the reason is simple: getting leverage to upside and downside moves.

PulteGroup, Inc. (NYSE: PHM) saw a whopping 20,352 of the SEPT-2010 $8 PUTS versus a prior open interest of only 692 contracts.  The $7 PUTS also saw 1,444 contracts trade versus an open interest of only 1 contract (yep, one).

Sunoco Inc. (NYSE: SUN) had a professional trader making a spread bet that is up to them to figure out but this one initially saw crazy volume in the AUG calls:

• $Str    Volume    OpInt
• $26    3,600    407
• $27    6,300    695
• $28    4,501    512
• $29    20,000    850
• $30    384,004    13,102
• $31    26,400    1,264
• $32    52,507    3,645
• $33    6,306    1,394

Have a great weekend!

JON C. OGG

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Emergent Purchase Drives Up Trubion In Pre-Market

Trubion Pharmaceuticals, Inc. (NASDAQ: TRBN) shot way up in pre-market trading preceding the company’s acquisition by Emergent Biosolutions Inc. (NYSE: EBS).  At the 8:35 AM EST Trubion is up 49.67% from $3 to $4.49 during a 52-week range of 2.29 â€" 6.75.  The company has also already traded 3,000 shares, a significant figured compared with their average of 16,011.

The transaftion, if it is completed, will provide Trubion shareholders with $1.365 in cash, as well as 0.1641 shares of Emergent common stock for each share of Trubion they currently possess.

-Michael B. Sauter

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