Friday’s rally failed to carry over into Monday, as the major market indices slumped to start the week. The S&P 500 was the loss leader, dipping 0.51% on the day, followed by the Dow Jones Industrial Average. On the options front, traders remained mostly positive, with the CBOE put/call volume ratio rising slightly to 0.61, while the 10-day moving average edged higher to 0.65.
Among the day’s most active options, Netflix, Inc. (NASDAQ:NFLX) received a boost after analysts at Bank of America while BlackBerry Ltd (NASDAQ:BBRY) shares surged on from Apple Inc. (NASDAQ:AAPL). Finally, Cisco Systems, Inc. (NASDAQ:CSCO) ahead of the company’s third-quarter earnings report.
Netflix, Inc. (NFLX)
NFLX stock rallied nearly 3% on Monday as traders cheered an . BofA cited strong subscriber growth and long-term earnings potential for the upgrade. BofA also more than doubled its price target to $722 from $350 per share.
Despite the praise, options traders’ optimism remained subdued amid elevated volume. On the day, 120,311 contracts traded on NFLX stock, with just 51% crossing on the call side. In the June series of options, NFLX’s overhead $610 and $615 strikes are the most popular, sporting open interest of 3,293 contracts and 3,430 contracts, respectively.
In premarket activity, NFLX is giving back some of yesterday’s gains, slipping 0.75% at last check.
BlackBerry Ltd (BBRY)
Wall Street loves rumors — especially those that sound like a solid exciting idea.
Yesterday, the Street was abuzz with musing that as part of a push into the enterprise market. Despite a lack of evidence, BBRY shares soared nearly 6% on the rumors, and options traders jumped at the chance to speculate.
Overall, 142,008 contracts traded on BBRY stock, with a hefty 76% of Monday’s volume changing hands as call contracts. The activity furthers a recent trend for BBRY options, as increased call activity has pushed the stock’s May/June put/call open interest ratio lower over the past month to its current perch at 0.74. Currently, peak June open interest rests at the out-of-the-money $11 strike, totaling 21,757 contracts.
Cisco Systems, Inc. (CSCO)
Look for Cisco Systems to remain a hot topic among options traders today, as the company marches toward tomorrow afternoon’s third-quarter earnings report. Wall Street is looking for a profit 53 cents per share, but the whisper number currently rests at 56 cents per share.
Optimism may be on the rise for Cisco, with while . On the other hand, noted some unusual call options activity on CSCO stock during Monday’s action, with a trader apparently selling 2,200 May $30 calls for 38 cents, or $38 per contract.
The $30 level is a breakout point for CSCO stock, and sold calls at this level may indicate a lack of confidence in the company’s quarterly results.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
