Exercise Your Option (To Vote)
As the day of reckoning for the nation’s leadership is
finally at hand, the options market seems more enthusiastic about the outcome of
the election than in moving paper. Even CSCO’s much-awaited earnings release,
which beat estimates by a penny on a 66 percent rise in revenues, failed to
significantly impact the options order flow.Players in the top five ‘names’ in terms of order flow in the
pre-open activity today were as follows: CSCO, ORCL, MSFT, INTC, JNPR. Note that
CSCO, although in the lead spot, actually showed a slight decline in flow from
yesterday. Overall pre-bell market showed buyers outnumbering sellers by a 2:1
margin.
In CSCO’s pre-open, put sellers vastly outnumbered buyers
11:1 … indicating a liquidation of insurance? MU showed some increased
activity in terms of contracts today, as Goldman Sachs upgraded MU to its
RECOMMENDED LIST with a $70 price target. MU’s
pre-open paper showed an even split, 1:1, between call buyers and sellers.
By 9:30 EST, CSCO put selling remained high at 8:1. Companies
reacting sympathetically to Cisco’s results, PMCS, BRCM & CIEN, all have
moved to the top order interest, exhibiting similar characteristics of mix. Put
selling dominates.
mso-fareast-font-family:”Times New Roman”;mso-ansi-language:EN-US;mso-fareast-language:
EN-US;mso-bidi-language:AR-SA” Times>This selling has not dented historically high
implied volatilities in any of these names. Front month levels have come in a
bit, but mid-term and long-term expiries remain high.