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Kongzhong Corp. (NASDAQ: KONG) is having a strong trading day in the stock, but its implied volatility via options is rising 21% to 58% on the day with shares 13% higher on a positive mention at Navellier. There looks to be more to the move. Two block buyers at the offer on wide spreads of 3,000 contracts each in the OTM February $12.50 calls came in at 10:24 and 10:31am. Call volume is already 35X daily volume.
At 10:40 AM EST shares are up over 13% at $11.79 on 488,000 shares. Average share volume is 339,000 shares and the 52-week range is $3.14 to $16.16.
JOE KUNKLE, OptionsHawk.com
Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) are playing give-back this morning after more and more pundits and reports keep calling these stocks (under government conservatorship) worthless. The government can offer unlimited support, but that is no assurance that the stock and preferred shares won’t be wiped out.
FNM lost gains seen early yesterday and closed down $0.02 at $1.25 on over 124 million shares. At 8:53 AM EST we have seen 1.01 million shares trade and the last print was down 4% at $1.20.
FRE also lost its earlier gains yesterday and closed down $0.10 at $1.50 on over 64 million shares. At 8:53 AM EST we have seen 440,000 shares trade hands at $1.43 for a 4.6% drop so far.
JON C. OGG
Small Cap Bear 3X (NYSE: TZA) trading 27,000 January $9 calls, mostly buyers looking for market pullback as the volume is well above the open interest of 4,171. 45% of the trades have traded at the offer, 17% at the bid, and the remainder at the mark, with the larger blocks on the offer. Small Caps have had a great 2009 and may be the first to be dumped in 2010 as Portfolio Managers look to move to quality and safety with strong earnings power and high dividend yielding companies. Also, as my market outlook stated this morning, the 1,135 level in the S&P looks to be a near term top, and we could pull back to 1,075, which would send the TZA well above $11, doubling the value of these calls. Much of the volume may be portfolio hedges going into 2010, but it still shows caution, and targeting a 3X small cap bear fund makes sense, as it is the group likely to be sold off the hardest on a market pullback. The call volume is already 3X average daily call volume.
JOE KUNKLE, OptionsHawk.com
Trimeris, Inc. (NASDAQ: TRMS) is getting drummed this morning. The company’s tender offer by Arigene Co., Ltd. and RTM Acquisition Company is being terminated because Arigene was unable to secure sufficient financing for purposes of funding the tender offer. The tender offer expired on Monday, December 28, 2009. Trimeris had a market cap of a mere $71 million yesterday at $3.18 before the effects of this morning’s drop. At 8:49 AM EST we have shares trading down 18% at $2.60 on 67,000 shares. Average volume is 323,000 shares and the 52-week trading range is $0.84 to $3.68.
JON OGG
Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) have already been covered earlier and the news is well known by now. The U.S. Treasury has ended a cap to how much financial aid can be applied to the government sponsored entities already under conservatorship. Effectively, the Treasury will provide capital on an as needed basis to both companies over the next three years in a bid to reassure investors over the debt issued by both companies.
UPDATE at 1:58 PM EST: Freddie Mac is up 26% at $1.59, but volume is 56 million versus 23 million shares on average. Fannie Mae is up 21% at $1.26 on 108 million shares versus an average volume of 38 million shares.
——– UPDATE: At 8:26 AM EST we have FNM up 23% at $1.29 on over 3.2 million pre-market shares and FRE is up 25% at $1.58 on over 1.13 million shares.
——— FIRST at 7:35 AM EST: Fannie Mae (FNM) closed at $1.05 Thursday, and shares are indicated up at $1.25 X $1.27 this morning. Freddie Mac (FRE) shares closed at $1.26 on Thursday, while its shares are indicated up at $1.58 X $1.60 this morning.
JON C. OGG
Apple Inc. (NASDAQ: AAPL) is continuing a run to new highs. The ‘old-new’ 52-week trading range was $78.20 to $209.35. Thursday’s close was at $209.04. At 8:31 AM EST we have shares trading up another 1% at $211.27 on 180,000 shares in the pre-market. That might not be an unbelievable volume alert, but the fact that this is back at all-time highs and that the 180,000 shares makes it one of NASDAQ’s most active in the pre-market make this representative of the alert here. -JON OGG