Wednesday, October 19, 2011

Morning Note

October 19, 2011

Equity futures are trading mixed to fair value. European markets are in positive territory, reacting to the volatility in the US in the last hour of trading: US markets first saw a knee-jerk rally on the Guardian report that an agreement on a €2T rescue fund had been reached, and then pulled back on the realization that the €2T represented the impact of leverage, and not an increase in the absolute size, and then subsequent headlines that the €2T figure was "totaly wrong". Underperformance in Nasdaq futures reflects Apple's (AAPL) earnings miss, while S&P and Dow futures are above fair value.

Bullish sentiment increases to 35.8% from 34.4% in the latest US Investor's Intelligence poll. Bearish sentiment decreases to 41.0% from 46.3%
Those expecting a market correction increases to 23.2% from 19.3%

Libor fixings
- Overnight Libor: Dollar: 0.141% vs prior 0.143% ; Sterling: 0.584% vs prior 0.584%; Euro: 0.856% vs prior 0.859%
- 1-month Libor: Dollar: 0.245% vs prior 0.245% ; Sterling: 0.698% vs prior 0.697%; Euro: 1.307% vs prior 1.305%
- 3-month Libor: Dollar: 0.412% vs prior 0.409% ; Sterling: 0.970% vs prior 0.968%; Euro: 1.513% vs prior 1.508%

WTI +$0.21 to $88.55

Nat'l gas +$0.010 to $3.563

Spot Gold ($6.20) at $1652.59

10-yr yield 2.2084%
30-yr yield 3.2092%

Asian Markets

Most Asian markets finished mixed today after recovering some of yesterday’s losses in the morning on the Guardian report that the EFSF would be expanded to €2T; the fact that the report was denied and the Moody’s downgrade of Spain meant caution eventually ruled. Tech stocks generally rose in response to Intel’s (INTC) results, though Apple-related stocks (AAPL) fell in response to Apple’s. Financials led Hong Konghigher. South Korea rose.
Large banks led Australia up, but miners fell in response to lower copper and iron ore prices. Drugmakers rose in Japan as investors chased defensive stocks. Taiwan opened higher, but finished flat as Apple’s results pushed its suppliers to losses. China finished down slightly as strength in financials was outweighed by weakness in property and material stocks. Thailand fell again. China September foreign direct investment +7.9% y/y. The yen is trading at 76.77 to the US dollar.

European Markets

European equity markets have pared opening gains after EU officials denied that there has been an agreement to increase the size of the EFSF as reported yesterday in the Guardian newspaper. Moody's downgrade of Spain and S&P's negative rating actions on Italian banks also weighed. Greek unions started a 2-day strike ahead of the parliamentary vote expected on 21-Oct, to approve the latest round of austerity measures. BOE Minutes; BOE MPC voted 9-0 to keep rates steady at 0.5%, voted 9-0 to raise QE total to £275B from £200B in October. Mixed results after the close in the US, Intel (INTC) up +3.5% in Frankfurt, Yahoo (YHOO) +2.3% and Apple (AAPL) (5.3%) and amongst heavy-weights in Europe provide little overall direction as sentiment towards a deal being struck to solve the EuroZone's debt crisis at the EU Summit on October 23rd remains the markets main focus.

Today's Economic Releases (Eastern Time)

04:30 UK BOE MPC minutes (Oct);
05:00 Eurozone Construction Orders y/y (Aug); consensus n/a
07:00 US MBA Mortgage Purchase Applications (14-Oct); consensus n/a
08:30 US CPI (Sep); consensus +0.3%
08:30 US CPI ex Food & Energy (Sep); consensus +0.2%
08:30 US Housing Starts (Sep); consensus 588K
08:30 US Building Permits (Sep); consensus 610K
10:30 US DOE Crude Inventories (14-Oct); consensus n/a 

Today's Key Events (Eastern Time)

09:00 Fed's Lockhart speaks
14:00 Fed's Beige Book
17:00 Chevron Mid Q3 Update
—:— Agriculture Investment Summit Asia
—:— American Filtration & Separations Society (AFS) Conference
—:— Citi Greater China Investor Conference
—:— FBN Securities with Progress Software
—:— Gartner Symposium/ITxpo 2011
—:— GHS Securities with Comstock Mining
—:— GHS Securities with Evolution Petroleum
—:— GHS Securities with Panhandle Oil and Gas
—:— Global Hunter Securities with FX Energy
—:— Global Hunter Securities with Natural Gas Services Group
—:— MedAssets Technology & Innovation Forum
—:— Petroleum Development Business Development Update, 2012 outlook at Analyst Day
—:— Sanderson Farms Investor Conference
—:— Solar Power International
—:— Vascular Interventional Advances ~ VIVA
—:— VMWorld 2011 - Denmark 

Company Specific News / Other News

AAPL (Apple reports Q4 EPS $7.05 vs Reuters $7.38)
APOL (Apollo Group reports Q4 EPS $1.02 ex-items vs Reuters $0.94. Reports Q4: Revenues $1.12B vs Reuters $1.10B)
ATMI (ATMI reports Q3 EPS $0.25 vs Reuters $0.25; Reports Q3: Revenues $95.0M vs Reuters $98.0M)
BK (Bank of New York Mellon reports Q3 EPS $0.53 vs Reuters $0.52. Reports Q3: Revenues, excluding net securities gains, $3.68B vs Reuters $3.70B)
BLK (BlackRock reports Q3 EPS $2.83 ex-items vs Reuters $2.65)
CKP (Checkpoint Systems revises global restructuring plan; updates guidance)
CSX (CSX Corp reports Q3 EPS $0.43 vs Reuters $0.43)
INTC (Intel reports Q3 EPS $0.69 ex-items vs Reuters $0.61)
JNPR (Juniper Networks reports Q3 non-GAAP EPS of $0.28 vs Reuters $0.28)
LLTC (Linear Technology reports Q1 EPS $0.47)
SON (Sonoco Products reports Q3 base EPS $0.66 vs Reuters $0.64)
TRV (The Travelers Co reports Q3 EPS $0.79 vs Reuters $0.87; Reports Q3:
Revenues $6.41B vs Reuters $5.64B)
TXT (Textron reports Q3 EPS cont. ops. $0.45 vs Reuters $0.31)
USB (US Bancorp reports Q3 EPS $0.64 vs Reuters $0.62; Reports Q3: Revenues $4.80B vs Reuters $4.72B)
UTX (United Technologies reports Q3 EPS $1.47 vs Reuters $1.44;
Reports Q3: Revenues $14.80B vs Reuters $14.55B)
YHOO (Yahoo! reports Q3 EPS $0.23 vs Reuters $0.17)

CAT (EU Commission approves acquisition of MWM by Caterpillar)
STX (EU Commission clears proposed acquisition of Samsung's (005930.KS) hard disk drive business by Seagate Technology (STX))
WMB (Williams prepares for full tax-free spinoff of E&P business by YE11)

Corporate Actions
ABT (Abott said it plans to separate into two publicly traded companies, one in diversified medical products and the other in research-based pharmaceuticals)
CSC (CSC CEO Michael Laphen informed the board he plans to retire)

Other News
Eurozone Sovereign Debt Crisis
•  No deal reached on scaling up EFSF: Reuters, citing two senior EU officials, reported that no agreement has been reached yet on scaling up the EFSF. The sources dismissed a report in the Guardian newspaper that came out in late afternoon trading in the US on Tuesday that said thatFrance and Germany had agreed on plan to increase the firepower of the EFSF to €2T by offering first-loss guarantees. Reuters added that a second source pointed out that "It's naive to think you can make those calculations and come up with a nice round 2 trillion figure. It's not nearly as simple as that".
• EFSF firepower models need more work: Reuters cited comments from Austrian Finance Minister Maria Fekter, who said that models to expand the firepower of the EFSF via first-loss guarantees require much more preparatory work. She added that along with the insurance option, officials have also been discussing a banking license for the bailout fund (though she acknowledged some uncertainties surrounding this dynamic). In addition, she noted that private sector investors in Greek debt must contribute more to a second bailout package than agreed in July.
• EFSF could aid states with interest payments: Reuters noted that Handelsblatt reported on Wednesday that Germany is considering whether the EFSF could be used to help states with interest payments on their debt. Handelsblatt cited government sources who said that assistance could be provided in the form of a suspension of interest payments, with the EFSF issuing a zero coupon bond for the interest. The paper added that emerging market countries could help boost the size of the EFSF.
• French warning to euro summit: The FT reported that in sharp contrast to recent comments out of GermanyFrance warned on Tuesday that European unity would be at risk if leaders failed to take aggressive measures to tackle the debt crisis at a crucial summit this weekend. The paper added that the differing sentiments in Paris and Berlin seemed to mirror continuing divergences between the countries over the substance of a weekend deal. The article noted that Germany continues to push for significant losses for Greek bondholders, while resisting efforts to increase the firepower of the EFSF. France in turn has pushed back against bigger Greek haircuts and said that they should only be pursued if the rescue fund is enlarged to prevent contagion.
• France faces ratings heat: The WSJ noted that France's ability to play a leading role with Germany in fixing the Eurozone sovereign debt crisis was thrown into doubt on Tuesday after Moody's warned that it may lower the outlook on the country's AAA credit rating. The paper said that a downgrade of France would be devastating to the EFSF, noting that without France at the highest rating, the bailout fund (as currently structured) could lose more than a third of its firepower.
• German government to cut 2012 growth forecast: Reuters citing coalition sources, reported that Germany will nearly halve its forecast for growth in 2012 to 1%. The article noted that the government is set to announce its latest estimates on Thursday. Coalition sources told Reuters that Economy Minister Philipp Roesler would revise his previous forecast of 1.8% growth next year to about 1%, and would also cut his 2011 forecast to 2.9% from 3%. The article also pointed out that a Reuters poll of more than 20 economists suggested that Germany is teetering on the brink of recession due to the deepening of the Eurozone sovereign debt crisis.
• European banks vow $1T shrinkage: Bloomberg said that European banks may not be able to raise money fast enough to prevent government-forced recapitalizations. The article noted that while banks in France, the UK, Ireland, Germany and Spain have announced plans to shrink by ~€775B in the next two years to reduce short-term funding needs and comply with tougher regulatory capital requirements (Morgan Stanley predicts that the figure could reach €2T across Europe), a lack of buyers and the losses banks face on loan sales are making those targets unrealistic.
• Santander's Botín attacks EU capital plans: The FT said that in a speech at a Santander banking conference on Tuesday, Santander executive chairman Emilio Botín attacked European plans to force banks to raise more capital. He argued that the proposals create “insecurity and confusion” and will encourage banks to reduce their lending. Recall that Deutsche Bank CEO Josef Ackermann has also been a vocal critic of forced recapitalizations. The article noted that while details of the recapitalization plan are still being hashed out and there are some disagreements to overcome, sources close to the discussions say that there will be no backing away from setting higher capital demands for the region's big banks, even after writing the down the value of their holdings of peripheral sovereign debt.
• Papandreou vows further austerity as strikes shut schools, hospitals: Bloomberg noted that Greek Prime Minister George Papandreou vowed to push through a further round of austerity measures as protesters took to the streets of Athens in a 48-hour strike. The article said that police estimated that at least 50K people gathered in Athens today in one of the biggest demonstrations yet against the latest austerity push that includes public-sector job cuts, tax increases and additional reductions in pensions and wages. Bloomberg also pointed out that with a four-seat majority, Papandreou is banking on his Pasok party lawmakers to withstand the public anger and push through the measure in a vote due late tomorrow.
• Bond freeze ends for companies on the periphery: The FT said that companies from the Eurozone periphery have been able to sell bonds again after a three-month hiatus stemming from concerns about the sovereign debt crisis. It noted that Telecom Italia sold €750M in senior unsecured paper late last week, and was quickly followed by Iberdrola, Enel and Telefonica. The paper pointed out that all issues were heavily oversubscribed. It also said that the sales indicate that the debt markets may be able to fill some of the void stemming from a pullback in bank lending, which has traditionally been the dominant source of funding for companies in Europe.

Newspaper Articles / Headlines

Samsung Electronics COO Lee Jae-yong met with Apple (AAPL) CEO Tim Cook. Arirang reports that this morning, Lee sidestepped reporters' questions about the companies' patent battles, and said Samsung will supple NAND flash memory chips and other smartphone components until next year. Lee said the meeting revolved around Samsung's giving Apple "better quality" components in 2013-4.

Barron's Weekday Trader is positive on Alcatel-Lucent. Barron's Weekday Trader is positive on ALU citing: Company's strong product offerings especially when it comes to 4G technology. Trading levels well below its historical norm of 13-17x profits. Possibility of the company divesting in its enterprise business. Long term growth potential of the stock.

Detroit News
- Ford employees ratify contract. A separate Detroit News article says that Chrysler (F.IM) employees have started voting; voting is to end 25-Oct.

- Thai floods mean hard-disk-drive prices are headed up next month. Industry sources tell DigiTimes that Western Digital (WDC), Seagate Technology (STX), Hitachi Global Storage Technologies (6501.JP), and Toshiba (6502.JP) will need longer than they first thought to restart their factories in Thailand. The sources don't give estimates for the price increases, saying it will depend on the damage the floods have wrought.

Economic Times
Glencore (GLEN.LN) in talks to buy 24% of Cronimet Alloys for INR500-750M (gbp6.4-9.7M). An investment banker with knowledge of the deal tells the Economic Times that the company's promoters are willing to sell part of their 70.5% holding at an unspecified premium to the market price. Cronimet is a ferro chrome maker.

Financial Times
Countries are behind on Basel II, let alone Basel III. The FT reports that the Basel Committee on Banking Supervision, revealed yesterday (18-Oct in Europe) that six of the 27 countries involved in setting Basel rules have yet to enact the reforms from 2004, and 16 of them have yet to draw up rules for Basel III.
Dropbox funding round values it at $4B.
William Hill faces problems in online operation. The company announced yesterday (18-Oct in Europe) that it has sent senior staff to Tel Aviv, where employees walked out 16-Oct. A person close to the situation tells the FT that despite William Hill's claim that consumer websites have been unaffected, the operations are in fact not running at full capacity.
Police investigating tax fraud seize €245M of UniCredit funds. People familiar with the matter tell the FT that the investigation relates to tax declarations in 2007-8, and Barclays (BARC.LN) set up the financial structure of Project Brontos, a "complex financial scheme." Italian reports say UniCredit paid tax on 5% rather than 100% of the cash flows that Brontos received. The article notes that raids in Italy tend not to end up with convictions.
Canadian Wheat Board could become takeover target next year. The FT reports that legislation was proposed today that would force the board, which posted C$5.1B in sales last year, to privatize by 2016. A senior official tells the FT that the board would be permitted to go private sooner if an acceptable offer was received. Without saying they are likely to consider the purchase, the article says Cargill, Viterra (VT.CN), and Richardson International are the board's largest operators, and it is thought that Bunge (BG) and Archer-Daniels (ADM) want to grow in Canada.

Glencore (GLEN.LN) in talks to buy 24% of Cronimet Alloys for INR500-750M (gbp6.4-9.7M). An investment banker with knowledge of the deal tells the Economic Times that the company's promoters are willing to sell part of their 70.5% holding at an unspecified premium to the market price. Cronimet is a ferro chrome maker.

Les Echos
Areva may cut 800 jobs in Germany. Citing an Expansion newspaper Areva may nuclear cut 800 jobs in Germany, close a plant in Belgium, review its proposed Eagle Rock uranium enrichment plant in the U.S. and plans to cancel the mining project Trekkopje in Namibia.

London Times
- Large businesses looking for alternatives to Lloyds Banking Group (LLOY.LN), Royal Bank of Scotland (RBS.LN). The Times reports that an Association of Corporate Treasurers official said yesterday (18-Oct in Europe) that businesses are worried that the recent Moody's downgrades of the banks will result in their imposing higher costs on borrowers. He said businesses don't want to cut ties with the British banks, but they are talking with foreign banks, particularly Japanese ones, about increasing business with them. Bank insiders deny to the Times that they have seen any change in corporate customers' behavior since the downgrades.

Los Angeles Times
US retailers' hiring plans for Holiday don't show much y/y growth. The article is largely a summary. The LA Times reports that the National Retail Federation expects retailers to hire 480-500K seasonal workers vs last year's 495K. The article gives the following company-specific projections:
Macy's (M) 78K, +4% y/y
Kohl's (KSS) more than 40K, +5% y/y
Target (TGT) "slightly more than" last year's 40K
JC Penney (JCP) 37K vs year-ago 30K
Best Buy (BBY) 15K, and current workers will get extra hours; the company took on about twice as many seasonal workers last year
Toys R Us more than 40K, (5K) y/y

New York Times
- Not clear who will take control of News Corp after Rupert Murdoch leaves. In a great deal of depth, the front-page article adds color to the disagreements between Rupert Murdoch and James Murdoch and also James's history, but it doesn't break any news.

- Thai floods may have fundamental effect on hard-disk-drive industry landscape. The Nikkei reports: Western Digital (WDC) and Hitachi Global Storage Technologies (6501.JP) factories have been harder hit than have Seagate Technology's (STX). Toshiba's (6502.JP) factories have not been affected as badly as WDC's Samsung Electronics (005930.KS) only manufactures in China, and so it has been unaffected. Observers say it seems possible that the WDC-Hitachi issues may end up preventing their merger, especially if Seagate's purchase of Samsung's operation is approved first

- Bumi wants to merge PT Bumi (BUMI.IJ), Berau Coal Energy (BRAU.IJ). But insiders tell the Telegraph that the idea comes dripping with regulatory issues, since Bumi does not want to be required to make a full offer for the combined entity, which it would own 65% of. The article also says Bumi may be close to refinancing $600M of debt for PT Bumi.

Wall Street Journal
- WSJ looks at steel industry's production cuts and their knock-on effects.
The article is largely a summary, detailing some announced cutbacks and how coal stocks are reacting. Alpha Natural Resources (ANR) says an Indian steelmaker is seeking to reopen its contract; Cliffs Natural Resources (CLF) describes customers as "more cautious but not outright cancelling or delaying shipments." A plate steel processor says mills are offering steel at lower prices in the hopes of avoiding cutting production.
- WSJ is cautious on Goldman Sachs. A "Heard on the Street" column says the bank's Q3 numbers weren't that bad, all things considered. But the performance reinforces the view that Goldman is unlikely to ever rule the world again the way it once did. And the general realization of that, combined with the shifting atmosphere for the industry, means it will become progressively harder for the stock to trade at 100% of tangible book value.
- WSJ is positive on Apple. While conceding that nothing is guaranteed, a "Heard on the Street" column says that the company's sales seem likely to keep rising for a long time on the strength of its iPhones and iPads.
- On getting approval from China Banking Regulatory Commission, Nomura (8604.JP) to buy GE Capital Finance (China). People familiar with the matter don't provide the WSJ a price. If approval is given for the purchase, Nomura will need to go through several rounds of license approvals before the unit can become a full bank. The article says that GE Capital has nine offices and 150 employees in Greater China, but it also says that Nomura is not attempting to buy the entire operation.
JPMorgan Chase (JPM) passes Bank of America to become US's largest bank, measured by assets. The article is basically a summary, breaking no news. It traces the history of BAC's rise in size, and the issues it is now facing.
European regulators scrutinizing Euribor. Documents were seized in raids across Europe on Tuesday and the probe is an offshoot of the Libor investigation, according to the headlines Full list of target banks isn't clear, though Euribor is set by over 40 banks. Officials are looking into the possibility of Euribor manipulation and are likely seeking more information about how Euribor is set


Bank of America Merrill Lynch: upgraded ZLC, CP
BB&T: upgraded CNW
Canaccord Genuity: downgraded RRC
Citi: downgrade APU
Collins Stewart: upgraded AUXL
Goldman Sachs: downgraded EDU
Jefferies: upgraded WFM
JMP Securities: downgraded ANDS
Moody's: downgraded Spain's government bond ratings to 'A1' from 'Aa2'
Morgan Stanley: downgraded ATW, RDC
Needham: upgraded CTXS
RW Baird: upgraded UNF
Stifel Nicolaus: downgraded RNOW
Wells Fargo: downgraded JNPR
Wunderlich: upgraded EDU


With 83% of the SPX reporting between now and Nov expiration, and events in Europe threatening to boil over, we are puzzled by the fact that vol is flat across the front three months of the term structure (Nov, Dec, Jan vol all roughly equal). Equity markets might be higher but other risk indicators are flashing red.  European Senior default risk is at a 6-session high, Asian Sov. CDS is bouncing hard off of yesterday’s 1-mo lows, French 5 yr CDS briefly widened >100bps over German 5 yr CDS and German (safe haven) 10-year bonds are back below their falling 200d MA.

In Monday nights Option Intelligence piece, we noted that average 60-day pair-wise correlation among SPX members has  jumped into the 70’s range- historically the domain of only the tightest knit sectors. While it has yet to be seen whether or not Q3 earnings can change get the market to focus on single stock dynamics and break the cycle of high correlation, early signs don’t look encouraging

Emerging markets flow has turned from bullish to bearish

Whereas we saw a pretty steady drumbeat of bullish option activity across the emerging spectrum over the past few sessions, today some large bearish trades are hitting the tape. In EEM one investor sold 47,000 Dec 40 calls for $1.40. Separately, we saw purchases of 10,000 EEM Dec 34 puts and 11,000 Mar 30 puts. These put purchases look strikingly similar to trades in Dec and March puts on XLB and XOP (see below).

Sector Color

Like the broad index, sector vols are down modestly on the day. Leading the way are financials with XLF 30day atm vol in by about 11%. This isn’t altogether surprising considering the largest names (JPM, WFC, C, BAC) are done with earnings.

Interestingly, gold, silver and mining stock vols are up to flattish on the day with 30-day atm vol up +2% in GLD, -50bps in SLV, -1% in GDX and +33bps in SIL. In last night’s Options Intelligence piece we commented on how cheap silver vol looked in particular given its unique macro position as safe haven asset and industrial metal.   SLV currently sports a 30-day implied/realized vol ratio of .76, lower than GLD (.87) and certainly lower than SPY (.95). With SLV already down 25% from Sep highs, we like leveraging its negative skew complexion to take a bullish position with limited risk via selling a put spread and buying a call.

MOO - Market Vectors Ag Fund (MOO)- Yet another sector ETF seeing opening put buying . 8745 May 38 puts trade for $2.60. and another 7,545 Feb 42 puts trades for $2.60. The activity is similar to bearish trading in XLB, XOP, and EEM today. MOO also saw opening buying of Feb 40 puts. In her morning note,  Dawn Doyle, BMO’s consumer trader noted that Grains are lower today, both on global economic concerns (China’s Q3 GDP slows weighing on commodities) and last nights crop progress report (showed conditions improving and harvest progressing). Livestock continued to gain ground after last weeks strong export data and are again trading higher this morning, with hogs making new highs. Japan is preparing to ease restrictions on US beef imports. Lower grains, higher pork margins-- good for SFD and TSN.

XOP - SPDR Exploration and Production ETF (XOP) Morning trades on the ETF include a 7520-contract block of Dec 45 puts purchased for $2.49. The next largest trade is the purchase of 6947 Mar 40 puts for $2.91. Again, this action is very similar to the put buying in XLB and MOO.

XLB - SPDR Basic Materials Fund (XLB) 37,000 puts were purchased in the first 15 minutes of the day (and only  435 calls). The largest trade is a purchase of 18,000 Mar 26 puts for $1.18. Also of note, an investor  bought 15,500 Dec 29 puts for $1.04.

Single Stock Color

DAL - Delta Air Lines call volume spiked to 52K (8x normal) as a diagonal call spread traded 25000x.  It looks like the investor was rolling a short call position (not Oct 8 calls, sold Dec 9 calls) initiated in Sep. Both options traded for $.66cents

NTAP - A large block of Oct 40 calls on NetApp traded early this afternoon, as a firm sold 14440 Oct 40 calls for $.17c tied to 231,000 shrs at 38.38. Looks like it closes o close a trade from Sep 14th when the Oct 34-40 risk reversal traded 15000x for 7cents

CREE – In a 3-way trade, an investor sold 12,400 October 27.5 calls at $1.75 and 16,128 November 35 calls at $.45 to buy 17,655 November 30 calls at $1.75. The Oct 27.5 calls looks closing while the Nov 30 - 35 call spread seems to be opening a new bullish position.

HGSI - Human Genome Sciences (HGSI) stock is up after the Daily Mail reported that Glaxo might bid $25 per share for the company. The article circulated late-Monday. HGSI is rallying around the story today and options volume on the biotech is heavier than usual. Nov 15 calls, which are 16.5% OTM and expiring in 31 days, are the most actives. 1,700 traded. Oct 12, Nov 16, Nov 17, Jan 17.5 and Jan 24 calls on HGSI are seeing volume as well. Meanwhile, implied volatility in the options on the stock jumped 47% to 127.5

TIF - Tiffany (TIF) Options volume on the New York-based jeweler is running 2.5X the daily average. October 75 calls were bought and are the most active- 3,690 traded. Oct 72.5, Oct 77.5 and Nov 82.5 calls are busy as well. Benzinga says the editor of Little Bear blog says he's long the stock on takeover speculation (unconfirmed).

IVN - Ivanhoe Mines (IVN) Options order flow on the Vancouver-based miner is bullish today. The top trade is the purchase of 7200 March 20 calls (12.6% OTM) for $2.70.  10,790 traded in total. Oct 15, Oct 18, Jan 22.5 and Jan 25 calls on the stock are seeing interest as well. No news on Ivanhoe today. Relative strength in shares and increased call activity comes less than a week after takeover chatter circulated in the name (10/13 on Briefing). 

 *Special thanks to Option Radar, BMO Capital, MEB Options, Bloomberg, Reuters, Optionistics, LiveVolPro, CBOE, AMEX, Option Monster, T.O.P. group, and all of the options desks and traders we work with to provide the option flow! 

 No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.


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