Today’s tickers: XHB, YHOO, S, MSFT, WFC, TIF, AMZN, & COF

XHB – Shares of the homebuilders fund have gained 0.5% during today’s trading session to arrive at the current price of $13.58. The XHB ticker symbol jumped onto our ‘most active by options volume’ market scanner after some 80,000 call options were traded on the ETF. Perhaps the bullish activity was fueled by reports that suggest the housing market has reached a bottom. New and existing home starts are said to have improved for the month of June, and at least some investors are positioning for a rally by the end of 2009. It appears that 20,000 calls were purchased at the September 14 strike price for a premium of 75 cents each and spread against the sale of 20,000 calls at the December 16 strike for 65 cents apiece. The plain-vanilla spread yields a net cost of just 10 pennies per contract. With the nearer-term calls just 42 cents out-of-the-money, we believe this investor would like the ETF to exceed $14.00, at which point he would exercise the calls and take delivery of the underlying shares by expiration. He would then like to see the XHB rally at least 14.25% to $16.00 by expiration in December. If this scenario should come to fruition, the trader will have exited the position by having the shares called away from him, with 13.5% gains tucked away under his mattress. Finally, there were another 40,000 calls that traded to the middle of the market at the December 16 strike for 58 cents each. While it is likely the work of a bullish investor, we must wait until Monday to check the open interest at that strike to confirm. – SPDR Homebuilders ETF

YHOO – Shares have recovered after spending a portion of the trading day in the red. Shares of the internet destination have climbed slightly higher by 0.5% to stand at $17.45. One bullish trader swooped into the September contract in order to initiate a plain-vanilla call spread. The transaction involved the purchase of 10,000 calls at the September 18 strike price for 92 cents apiece spread against the sale of 10,000 calls at the higher September 20 strike for 39 cents each. The net cost of the trade amounts to 53 cents and yields maximum potential profits to the investor of 1.47 if the stock rises to $20.00 by expiration. Shares must gain 6%…
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