Heavy betting on Visa, churn in Yahoo, and perhaps some misguided faith in oil majors ... that's the trend one expert is seeing in options.
With Visa scheduled to report after the U.S. markets close Monday, trade in the company's options was very heavy, Rebecca Darst of Interactive Brokers said on CNBC Monday.
"Visa was the topic of huge speculative interest among options traders on Friday...implied volatility was from 20 percent to around 55 percent -- that's the highest reading we have on record for fledgling options, with about three times as many calls moving as puts on Friday, clearly it would seem that option activity would favor the upside," said Darst. "The question in the case of Visa is, how high can it go?"
Demand was heavy in calls, the right to buy a stock at a specific price in the future, she said. (See her full comments about May 90 calls in Visa in the accompanying video).
Over the weekend Microsoft's offer to buy Yahoo expired, leading to speculation Monday about the prospect of Microsoft turning hostile. Darst said there was "a wave of defensiveness in Yahoo options late Friday."
There was a lot of action in puts, she said, which give traders the right to sell a stock for a certain price in the future.