Wednesday November 4, 08:46 PM
STOCKS NEWS US-Cisco option sentiment leans toward calls
Stocks on the move
Real (Frankfurt: BJU.F - news) -time Equity news
U.S. stock market report
1511 ET 04Nov2009 Cisco sentiment leans on call side ahead of earns
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Option (OPTI.NX - news) traders exchanged about 191,000 contracts in Cisco Systems Inc (NASDAQ: CSCO - news)
ahead of its quarterly results after the bell. Its shares rose 1.75
percent to $23.31 in late trading. Overall volume was triple the norm dominated
by roughly 128,000 calls traded, according to Trade Alert. Many of those calls
were bought aggressively. 'Thus far, we show better than 54 percent of the
calls bought on the offer versus just 45 percent of puts,' said optionMonster
co-founder Jon Najarian. The November $23 and $24 calls are the biggest
beneficiaries of the bullish sentiment, with each trading over 30,000
contracts. The Nov $23 call strike exceeded open interest by nearly 11,000
contracts, also a bullish sign into the bell, he said. Implied volatiliy was
higher in the front-month options and stood at 37 percent vs. 33 percent for
December options. 'This is not unusual, as we usually see what traders call a
positive 'Skew' to the pricing of options in the front month for EPS,' he said.
One trade included a 7,500 Dec $22 put/Jan $26 call risk reversal at 22 cents
in a position tied to shares, said WhatsTrading.com option strategist Frederic
Ruffy.
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