Explosive US Steel Options Volume (X)

United States Steel Corp. (NYSE: X) is seeing an explosion in its options trading on Wednesday.  Much is likely ahead of expiration for August this coming Friday.  But this also has to do with some speculation of a merger coming back to the metals sector.  If in ag and potash, why not steel or other metals?  As we always say, there are hundreds of rumors per year on buyouts, most never turn out to be true.  US Steel shares are currently up 5.5% at $49.95 on over 16 million shares versus average volume of 14.4 million shares.

Here is a breakdown of the NOON snapshot taken in CALLS option strike prices by month and the volume and open interest associated with them:

AUG$    Vol.    OpInt
$45.00    1,390    10,797
$46.00    1,786    9,714
$47.00    1,368    5,752
$48.00    10,207    7,120
$49.00    9,751    7,286
$50.00    19,890    13,479
$52.50    8,725    3,089
$55.00    7,194    5,331
$57.50    8,143    2,024
$60.00    1,123    330

SEPT$    Vol.    OpInt.
$47.00    1,625    2,804
$48.00    2,176    1,578
$49.00    1,343    1,250
$50.00    7,604    3,914
$52.50    4,711    3,451
$55.00    7,795    1,984
$60.00    8,522    2,096

OCT$    Vol. OpInt
$50.00    1,536    6,173
$52.50    2,102    2,178
$55.00    2,714    5,456
$57.50    2,870    1,455
$60.00    5,633    4,280
$62.50    337    648
$65.00    1,070    3,885
$70.00    2,712    2,068
$75.00    2,837    7,916

JON C. OGG

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Major Volume Spike in American Apparel (APP)

American Apparel, Inc. (AMEX: APP) is getting crushed.  Again.  We are seeing a second trading day of high stock volume after the Tuesday disclosure of a “going concern” where it might not be able to meet requirements and obligations inside its credit pact.  The company also disclosed that U.S. AG is looking into the circumstances of the resignation of Deloitte & Touche as auditor, as is the SEC.

The Wednesday drop is nearly the same as Tuesday.  Yesterday saw 2,550,600 shares trade hands and the stock closed down $0.36 at $1.03.  With average volume at 700,000 shares, this was a 3X volume alert.  We have another 3X volume alert today.  We have shares down $0.20 at $0.81 on more than 2.4 million shares already and the time is now only 11:05 AM EST.  This could trade more than 5 million shares at this pace, or more if the trading slowdown from 11 to 2:30 is not seen.

Shares hit a new 52-week low of $0.72 this morning.  Actually, that is an all-time low.

JON C. OGG

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Cardica Signs Deal With Intuitive

Cardica, Inc. (NASDAQ: CRDC), the company which makes medical instruments for coronary bypass operations, skyrocketed in pre-market trading today from $1.66 to $2.50, an increase of 5o.6%.  This growth comes during a 52-week range of $1.00 to $2.85, and is marked by the movement of 26,200 shares; a very significant amount for pre-market trading compared with the company’s daily average of 40,919.

The cause of this movement is a deal between Cardica and Intuitive Surgical, Inc. (NASDAQ: ISRG), in which Intuitive now owns 5% of available Cardica stock and has exclusive rights to the company’s intellectual property.

-Michael B. Sauter

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