Apple Options Volume Overshadows Stock Volume (AAPL)

There is a rare event today that has not been seen on many occasions.  Apple Inc. (NASDAQ: AAPL) is seeing more stock option trading interest today in its stock options on a fully leveraged basis than its shares are seeing.  The stock volume is actually anemic at 4.53 million shares as of 12:05 PM EST when a normal trading day’s volume is 17.5 million shares.

Here is the CALL option volume of the JAN-2011 CALLS:

$trike    Volume    OpInt
300.00    1,342    36,014
310.00    3,479    33,588
320.00    14,436    52,390
330.00    18,111    50,100
340.00    8,880    34,057
350.00    8,802    28,100
360.00    5,978    17,341
370.00    2,545    10,475
380.00    1,084    10,494
390.00    164    7,331
400.00    1,002    16,100
410.00    548    3,725
420.00    1,047    2,649

These alone come to over 60,000 contracts for the JAN-2011, which is over 6 million shares on a fully leveraged basis.  We have also seen close to 40,000 contracts trade in the PUTS for JAN-2011 and close to 10,000 contracts in each of the PUTS and CALLS in the weeklies that expire on December 30, 2010 as well.

JON C. OGG

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Daily Double: 10X Volume Alert in InterMune (ITMN)

InterMune Inc. (NASDAQ: ITMN) is soaring with more than a double on key news of its EMA recommendation of market ing approval in its idiopathic pulmonary fibrosis drug called Esbriet (pirfenidone).  The full news and analysis is available at BioHealthInvestor.com in the quest for potential ten-baggers.

What traders need to know is that at 10:20 AM EST we have a gain of 106% at $29.50 and the 52-week trading range is $8.34 to $49.46.  Even more noticed is a more than tenfold rise in average volume with 10.25 million shares having traded versus an average daily volume of about 944,000 shares.

The options volume, as you would expect, is now through the roof as well.  There have been over 10,000 contracts traded in the JAN-2011 CALLS and over 11,000 of the JAN-2011 PUTS.  The trading is elevated in teh April-2011 contracts as well.

Stay tuned, InterMune just got back on the map.

Jon Ogg

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Interchange Fee Proposals Cause Exponential Volume Spikes (MA, V)

Proposed change to Interchange Fees from the Fed is causing an exponential volume spike in shares of Visa, Inc. (NYSE: V) and Mastercard Incorporated (NYSE: MA).  It took a while for the exponential volume spikes to appear but appear they did.

At 3:24 PM EST we now have over 37 million shares of Visa traded with a 11.6% drop and the price is at $68.02 versus a close of $76.94 yesterday.

At 3:24 PM EST there have been over 6.1 million shares of Mastercard with a 9.5% drop to $225.49.  Average volume is only about 1.15 million shares.

JON C. OGG

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Massive Exponential Volume in Tenet Options & Stock, More to Come? (THC)

Tenet Healthcare Corp. (NYSE: THC) is trading more volume than we can recall ever seeing.  While the company has never really recovered its former glory, the hospital told Community Health Systems Inc. (NYSE: CYH) no to its $6.00 buyout offer.  The common belief now is that Community Health will have to raise its offer price if it wants the company.

Tenet shares have been unbelievably active today.  With just under an hour of trading before the market closes, the gains have been a whopping 54% to $6.63.  What is even more impressive is the trading volume.

Tenet has traded MORE THAN 200 MILLION SHARES versus and the average volume is not even 8 million shares.

Options have been through the roof: JAN 2011 $7.50 CALLS show 17,408 contracts traded versus a prior open interest of 21,921 contracts; the JAN 2011 $5.00 PUTS have traded some 11,513 contracts versus a prior open interest of 14,055 contracts.  The FEB-2011 $7.00 CALLS have traded 9,354 contracts versus a prior open interest of only 45 contracts against 2,164 of the $6.00 PUTS.  The MAY-2011 $7.00 CALLS have traded 15,211 contracts against an open interest of only 31 contracts.

JON C. OGG

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The Big Move Behind Horiyoshi Worldwide (HHWW)

Horiyoshi Worldwide, Inc. (OTCBB: HHWW) has virtually come out of nowhere and is one we have never covered nor that we are likely to cover ahead as long as it remains a bulletin board stock.  This is one that a trader pointed out to us simply with the big question “WTF?” yesterday and today.  As it is bulletin board you are entirely on your own but there is a story here as to why investors and speculators are behind it.  Horiyoshi Worldwide has risen for literally more than 20 trading days in a row.

DEC-NOV Date   Volume     Close
Dec 09, 2010.  7,662,500  $3.10
Dec 08, 2010.  5,457,800  $2.70
Dec 07, 2010.  7,227,500  $2.21
Dec 06, 2010.  3,374,400  $1.88
Dec 03, 2010.  2,763,600  $1.80
Dec 02, 2010.  1,061,000  $1.69
Dec 01, 2010.  1,557,900  $1.65
Nov 30, 2010.  2,317,800  $1.63
Nov 29, 2010.  2,404,100  $1.58
Nov 26, 2010.  1,580,600  $1.56
Nov 24, 2010.  2,982,800  $1.54
Nov 23, 2010.  3,879,200  $1.49
Nov 22, 2010.  1,362,500  $1.41
Nov 19, 2010.  1,393,000  $1.35
Nov 18, 2010.  1,068,900  $1.28
Nov 17, 2010.  1,747,500  $1.22
Nov 16, 2010.  690,400      $1.15
Nov 15, 2010.  274,500      $1.08
Nov 12, 2010.  288,873    $1.08
Nov 11, 2010.  622,489    $1.06
Nov 10, 2010.  949,525    $1.04
Nov 09, 2010.  1,371,065  $0.99
Nov 08, 2010.  123,055    $0.85
Nov 05, 2010.  20,000     $0.80

The news wires have shown distribution deals being announced, as well as small company financing.  This appears to be a cult stock that is running as it signs more high-end distribution deals for its apparel line.

Here is the company’s description in its press releases: Horiyoshi Worldwide Inc., designs, manufactures, and markets Horiyoshi the Third, a high end clothing and accessories product line based on the artistry of World renowned Japanese Tattoo Artist, Yoshihito Nakano (Horiyoshi III). Its line is being sold in approximately 45 luxury retail boutiques located in 25 cities worldwide. Debuting in Fall 2009, HIII has been featured in leading fashion publications such as the New York Times, International Herald Tribune, the Los Angeles Times, Anotherman Magazine, Vogue and Style.com.

Again, this is a bulletin board company and we do not prefer to generally cover these types of companies.

Consider this as one of those that “POSTED WITHOUT OPINION.”  Still, we had to take a look when there are moves of this sort.

JON C. OGG

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SIRIUS Volume Almost Double in First Hour Alone (SIRI)

By now you already know that Howard Stern has announced that he is sticking with SIRIUS XM Radio Inc. (NASDAQ: SIRI) in a new 5-year deal.  What is interesting is how much trading has gone into the news this morning.  It is almost an hour into the trading day and SIRIUS shares are already approaching 100 MILLION SHARES….

At 10:28 AM EST we have SIRIUS stock up 6.5% at $1.40 on literally 92.5 million shares.

The average volume is about 58 million shares and the 52-week trading range is $0.56 to $1.61.

The last day that we saw 100+ million shares trade was on November 4 with 185 million.  On October 13 there were 156 million shares traded, and we saw more than 100 million shares on October 5 and October 1.

JON C. OGG

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When 2 IPOs Nearly Double (YOKU, DANG, AMZN, GOOG)

There were two hot Chinese IPOs that debuted today and to call them ‘hot’ may be an understatement.  Seeing two near-doubles in a single day is not the norm even for a bull market.  These two are in Youku.com Inc. (NYSE: YOKU) and E-commerce China Dangdang Inc. (NYSE: DANG).

Youku.com Inc. (NYSE: YOKU) priced 15,847,700 American Depositary Shares at $12.80 per share.  E-commerce China Dangdang Inc. (NYSE: DANG) priced 17,000,000 American Depositary Shares at premium of $16.00 per ADS.

At 10:27 AM EST we have seen YOKU trade at $27.14 on more than 6.1 million shares already and the post-IPO range is $25.57 to $30.00.

At 10:27 AM EST we have seen DANG trade at $27.25 on more than 13.3 million shares already and the post-IPO range is $23.80 to $30.00.

Chinese IPOs have been extremely hot in 2010.  If you want to know why these are so hot that is a simple reasoning.  For DANG, think of it as the emerging version of Amazon.com Inc. (NASDAQ: AMZN) in China.  For YOKU, think of it as the emerging version of YouTube that is owned by Google Inc. (NASDAQ: GOOG).

JON C. OGG

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Netflix Sees Major After-Hours Trading (NFLX)

Netflix Inc. (NASDAQ: NFLX) is rapidly losing its greatness when it comes to momentum and growth investors.  On top of a well known short seller highlighting its flaws last week, the company is rather active in the after-hours session on news that its CFO is leaving.

The NASDAQ after-hours session shows that as of 6:00 PM EST the shares are trading down 3.6% at $183.00 after a close of $189.81.  After-hours volume is also very high considering close to a $200 share price.

Chief Financial Officer Barry McCarthy is leaving the company.  The listed reason is that he “has expressed a desire to pursue broader executive opportunities outside the company.”

The change is effective December 10.  Netflix shares are up close to 300% from the 52-week lows and he holds roughly 51,563 shares as of the November 10 date.

JON C. OGG

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Talbots Killed, Yet Options Alerts Matter (TLB)

The Talbots Inc. (NYSE: TLB) is having an awful day in the markets and on very strong volume.  The earnings report and the guidance are to blame.  While profits rose 17%, lower revenue and lower guidance is a drag and then some.

Earnings were $0.27 EPS and revenue was $299.1 million, while Thomson Reuters was calling for $0.25 EPS and $303.1 million in revenues.  Guidance was put at a loss for the coming quarter and that translates to an annual guidance of $0.70 to $0.78 EPS against a Thomson Reuters estimate of $0.87 and a prior forecast of $0.84 to $0.92.

At 11:40 AM EST we have shares down over 19% at $9.21 against a 52-week trading range of $6.81 to $17.79.  More importantly, the volume is already over 18.5 million, more than six-times than the 3.05 million shares on an average trading day.

We are seeing a move in options trading as well, although many trades are mixed.  The DEC-2010 CALLS showed the following:
CALL$    Volume    OpInt
9.00    1,183    653
10.00    1,227    3,377
11.00    1,469    5,652

Elsewhere, the JAN-2011 CALLS:
CALL$    Volume    OpInt
10.00    1,389    2,344
11.00    1,122    2,321

Even the JAN-2012 CALLS are active:
CALL$    Volume    OpInt
15.00    2,055    3,721

JON C. OGG

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Gel Results Cause 20X Volume Spike in Columbia (CBRX, WPI)

Columbia Laboratories, Inc. (NASDAQ: CBRX) is seeing a massive volume explosion this morning.  The company reported an update on its Phase III trial of Prochieve, a gel which aims to help preterm birth rate declines.  In short, it is designed to lower premature birth.  It and and Watson Pharmaceuticals, Inc. (NYSE: WPI) said that PROCHIEVE 8% significantly reduced incidence of preterm birth at less than or equal to 32 6/7 weeks gestation versus placebo.

The primary result showed that vaginal progesterone cuts the rate of preterm birth, which is said to affect 10 to 12% of all pregnancies in the United States with a cost of some $26 billion per year.

In just the first 9 minutes of trading and after the pre-markjet trading, Columbia Labs is seeing a 31% gain to $1.98 and it hit a new 52-week high of $2.00 per share with a new 52-week range of $0.80 to $2.00.  More importantly, there have been a whop[ping 4.5 million shares traded against an average volume of only about 200,000 shares per day.

The market cap after the pop is some $160 million, making many hope that more gains are possible simply due to a small market cap.

Watson shares are also higher with a 2.6% gain to $50.86 versus a 52-week trading range of $37.26 to $52.20.  Volume in Watson is much more normal at 325,000 shares against normal volume of 1.54 million shares per day.

JON C. OGG

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Bullish Options Bets in Tiffany (TIF)

Tiffany & Co. (NYSE: TIF) may have only closed up $0.10 at $63.30 on a normal day with 2.52 million shares on Friday.  The issue is that the 52-week range is $35.81 to $63.65 and average volume is 2.1 million shares.

The real activity was seen in the call option buying with a standout trading pattern.

We saw in the FEB-2011 $70.00 CALLS that the contracts traded were 8,834 contracts versus an open interest of 17,641 contracts.

Despite a monster run and despite high valuations, someone is betting on some added upside.  If not, they are hedging some short-bets.

JON C. OGG

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Volume Spikes From Secondary Offerings (SQNM, DRYS, TOO, QLIK)

Secondary offerings often create volume spikes in the shares, but we are seeing moves in several key stocks with secondary offerings.  The moves are in Sequenom, Inc. (NASDAQ: SQNM), DryShips Inc. (NASDAQ: DRYS), Teekay Offshore Partners LP (NYSE: TOO), and Qlik Technologies Inc. (NASDAQ: QLIK).

Sequenom, Inc. (NASDAQ: SQNM) said the underwriters of its offering that priced on December 2, 2010 have exercised in full their overallotment option to purchase an additional 2,100,000 shares; so the offering will total 16,100,000 shares at $6.00 per share for total gross proceeds of $96.6 million to Sequenom.  Shares are down 1.8% at $6.63 on almost 300,000 shares as of 9:50 AM EST; yesterday shares closed down only $0.06 at $6.75 but that was on more than 9.7 million shares.

DryShips Inc. (NASDAQ: DRYS) is soaring on word that its Ocean Rig UDW Inc. subsidiary plans to offer roughly $500 million of stock via a private placement to raise funds for the construction of its deepwater drillships.  DryShips at 9:50 AM EST is trading up almost 9% at $5.70 on 11.7 million shares versus an average volume of 14.9 million shares and versus a 52-week range of $3.28 to $6.95.

Teekay Offshore Partners LP (NYSE: TOO) is down 5.7% at $27.43 on more than 1.1 million units after it priced 5.6 million units at $27.84 to buy more ships.  Average volume is only 222,000 units a day and the 52-week range is $16.89 to $29.94.

Qlik Technologies Inc. (NASDAQ: QLIK) sold 11.5 million shares in a public secondary offering at $23.00 per share.  Shares have recovered and are down now ‘only’ by 1.1% at $23.09 versus a post-IPO trading range this year of $14.00 to $27.70.  Volume is through the roof at 2.2 million shares versus only about 350,000 on an average day.

These are not even all of the secondary offerings today.

JON C. OGG

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Unusual Gold LEAPS Option Alerts (GLD)

Gold is at a crossroads and the options trading is showing some unusual activity out in the long-dated LEAPS for the SPDR Gold Shares. The JAN-2012 $150.00 GLD CALLS have traded 7,479 contracts today versus an open interest of 27,030 contracts.  Last trade was $9.55.  If you go out farther in the LEAPS, the JAN-2013 trades are as follows:

• $150.00 CALL 3,056 contracts traded versus an open interest of 4,325, last trade $17.55.
• $160.00 CALL 1,010 contracts traded versus an open interest of 4,220, last trade $15.05.

We gave a fundamental and technical review at 247wallst.com and our affiliate at INO has a technical analysis showing that some key levels may have been reached.

JON C. OGG
1:20 PM EST

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