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We recently noted after Altria Group Inc. (NYSE: MO) raised its dividend that the dividend north of 7% would likely cause a huge dividend capture trading activity as te dividend date was before the expiration date of the September options. Our little belief ended up being the understatement of the year. Normally if you saw options activity like this, you would think that the stock was about to be acquired or that the company was going to get to start giving cigarettes out in machines at schools. That isn’t the case, but you will be amazed at the options trading in the SEPT-2009 CALLS:
Strike Volume  OpenInt.
$15.00Â Â Â 48,114Â Â Â 1,982
$16.00Â Â Â 112,109Â Â Â 4,495
$17.00Â Â Â 535,360Â Â Â 17,039
$18.00Â Â Â 664,058Â Â Â 21,031
The total volume in the stock today was a mere 23.3 million shares, still above the 16 million average. But the total leveraged amount of this if you just tallied up call volume would have been over 100 million shares… Don’t be fooled by that. This was a dividend capture trade.
Jon C. Ogg
September 10, 2009
BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) is a name which comes up in the emerging and speculative biotech takeover list rather frequently, and today we are seeing some interest on speculators. As of 1:10 PM EST we are now more than exponential on the volume alert after a quick CNBC tout by one of the Najarian brothers. We have seen 5.3 million shares versus an average volume of 1.36 million shares. Shares are up almost 10% at $18.03, and the 52-week trading range is $9.93 to $30.74. The SEPT-2009 $17.50 CALLS have traded some 6,365 contracts today, versus an open interest of 344 contracts. Even in the OCT-2009 $17.50 CALLS, these have traded 1,745 contracts today, versus an open interest of 770 contracts.
As our friends noted over at BioMedReports.com, this company is presenting data at the Morgan Stanley Healthcare Conference in New York City on Tuesday, September 15, 2009 at 1:35 p.m. ET.
JON OGG
Delta Petroleum Corp. (NASDAQ: DPTR) has been on a rampage on more than just heavy volume after the company had reportedly received approval to drill four new exploratory gas wells in Washington. At 10:52 AM EST we have shares trading up another 9.5% at $3.32 on over 10.7 million shares. The average volume is 4.7 million shares, but that figure was actually closer to 3.5 million before yesterday’s monstrous volume surge. Its 52-week trading range will show just how zany this stock is: $0.88 to $21.95.
On Wednesday we saw some 63.9 million shares trade hands and it closed at $3.03, but that is a huge gain compared to the 11.1 million shares after a $2.28 close on Tuesday and after a $1.96 close on Friday.
Delta has been around almost longer than many trading careers if you are under 40 or 45 years old. From 2006 to earlier in 2008, this one spent most of the time trading between $15.00 and $30.00. The mudslide in the stock chart here started in summer of 2008 and all of these gains which seem to be ludicrous are minor when you compare it to where this one has been in the past for a stock that is still under $1 billion in market cap today.
Analysts expect losses for the next two years and its history of earnings and revenues is a spotty one, particularly as revenues are expected to be one-third to half of what they used to be.
JON C. OGG
SEPTEMBER 10, 2009
Yahoo! Inc. (NASDAQ: YHOO) is up on an analyst upgrade as BofA Merrill Lynch raised it to BUY from NEUTRAL. Shares were originally up 2% but Carol Bartz gave a CNBC i-view outlining how good the Microsoft search pact is and how different teh company is from Google. At 8:56 AM EST we have shares up 3.5% at $15.30 on over 650,000 shares. -JON OGG
Titanium Metals Corp. (NYSE: TIE) is seeing severe options trading. The October $10 calls have traded more than 14,000 contracts with open interest of just 1,867 contracts as traders place large buy orders at the offer. The action comes a day after I recommended buying TIE on valuation due to comments from Boeing on the improving aviation forecast for 2011. Shares today broke above its 200 day EMA implying a move to at least $10.50 on the triangle breakout, and near an inverse head and shoulders breakout on the weekly. TIE is also often mentioned in takeover chatter. As of 12:55 PM EST the stock is up 6% at $9.41 and there have also been some 3.1 million shares that have traded hands. The 52-week range is $4.04 to $13.18 and the average volume is just under 3.2 million shares.
Joe Kunkle, OptionsHawk.com
General Electric Co. (NYSE:GE) is running up a second day on an analyst call as its price target was raised to $18 from $15 at Goldman Sachs. Shares are up over 2% at $14.81 on about 1.5 million shares as of 9:15 AM EST. This is a tiny fraction of the average volume for a full trading day but still is one of the more active movers this morning. Be advised that GE is now within striking distance of post-crash highs, which could signal a breakout of the stock closes up about 3% higher and holds that level.
Resistance Levels appear to be R1-$14.75, R2-$14.93, and R3-$15.07….
-JON OGG
VIVUS Inc. (NASDAQ: VVUS) is soaring on what is already exponential volume. The company’s interim update showed that patients taking Qnexa reduced their weight by up to 14.7% on average in one trial, and the drug also showed improvement in blood pressure and diabetes symptoms and risk factors. Vivus’ second study showed an average weight loss of about 13.2%. As far as how this compares to placebo, patients taking placebo lost less than 3% of their weight. As of 8:38 AM EST we have seen a gain of 50% at $10.33 and we have seen 3.6 million shares trade hands. Average volume is only about 750,000 shares and the prior 52-week high was $9.00. This will be a monster volume day for VIVUS. Be advised, this one does have call and put options on it. -JON OGG
hhgregg, Inc. (NYSE: HGG) is seeing activity in the October $15 puts, with shares at $16.80. These have traded more than 4,500 contracts against OI of 46, unusually large action and in multiple sizable lots with more than half the action offer side. Implied volatility is also spiking from 61% to 66%. The chart is looking fairly weak with a potential 20/50 EMA bearish cross. There does not appear to be any upcoming catalysts but potentially Analysts are beginning to feel the company’s expansion initiatives are too much for the current consumer environment, and the company may need to scale back expectations.   The put action is now nearly 100X the average action for a day.
Joe Kunkle, OptionsHawk.com
Osiris Therapeutics, Inc. (NASDAQ: OSIR) is getting clobbered hard as the biggest loser seen so far this morning. The company announced that its stem cell drug Prochymal failed both pivotal phase III studies in patients with graft-versus-host-disease. In short, back to the drawing board and back to drawing cash with stem cell research. This was halted for news at $12.21, but at 8:44 AM EST we have seen a 41% drop to $7.35 in the stock on over 140,000 shares versus a 310,000 share average daily volume. This will be an exponential volume dropper today. On day last week this traded 2.3 million shares and you have to go back to March 27 for another 2 million share day. Our guess is that today’s volume will blow those very active days away by a mile. Osiris does have stock options, and these were VERY active in SEPT-2009 PUTS and pretty active in CALLS on Friday. -JON OGG