What's moving in the options market? BJ's Wholesale Club, Wells Fargo, and Coal, according to Rebecca Darst of Interactive Brokers.
On BJ's ...
"Whenever the market sees a sympathy play in a stock -- a stock is moving by dint of something that happened in another stock in the same sector -- that provides a good opportunity for people who follow options to see whether the volatility in that stock may be overpriced or underpriced relative to what it should be, so it's with that in mind that we looked at the option in BJ's Wholesale Club , where implied volatility rose 12 percent yesterday to 51.5 percent, ranked among our top 50 implied-volatility gainers yesterday," she said Thursday morning on CNBC's "Squawk Box." "We saw options trading at five times the normal level. It looked like most of the options action yesterday took place at that August 35 line that was both the call and put line. If you trade those together, that's the straddle." (For her full comments, see video)
On Wells Fargo ...
"If the action that we saw yesterday is any indication it could suggest that option traders believe that Wells Fargo may be giving back some of these recent gains going into September. We saw yesterday ... a spike in implied volatility of 21 percent yesterday. Granted, implied volatility is off about a third in the past couple of weeks, but yesterday we saw puts out-trading calls by about three to one."
On Coal ...
"I think it's an interesting setup in coal, because, you know, you have very bullish earnings coming out from the likes of International Coal Group , from Peabody ; Arch Coal's on deck tomorrow; we've seen a lot of traders loading up on calls there for Arch ; I think (there may be) ... a very promising M&A outlook ... (that) many people are speculating for the industry, and yet we're seeing a number of contradictory signals in the option market."
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