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The options market is looking at mining equipment makers, cell phone equipment outfits, and the semiconductor sector, Rebecca Darst of Interactive Brokers said on CNBC's "Squawk Box" Thursday morning.
On mining equipment makers ...
"In general, the sector as a whole took a hit on the market's negative reaction to Joy Global's earnings, and, apropos of Joy Global [JOYG
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], we saw as of the close yesterday, some implied volatility on all of its options was hovering right around those pre-opening levels, at around 55 percent, versus 43 percent historic volatility. Incidentally, we also recorded the heaviest day of option-trading volume on record -- our records go back 52 weeks for Joy Global, with the equivalent of more than half its open interest in play.
"We, however, also saw some parallel option trading activity in another name in the space, Bucyrus [BUCY
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], which makes power shovels and drills for mining companies. We saw a 14 percent spike in implied volatility in Bucyrus options yesterday; it's up at 67 1/2 percent against 60 percent historic volatility reading on the stock." (See video for more)
Check Joy Global options here and Bucyrus options here.
On Nokia ...
"Interesting activity in Nokia [NOK
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] yesterday on back of the warning from Qualcomm [QCOM
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], suggesting that there may be a lengthening of the cell-phone replacement cycle. What we saw in Nokia was a spike in implied volatility of 13 percent; this was occurring sort of part and parcel with the activity in Qualcomm. It's up, actually, by a third over the past week."
Check Nokia options here and Qualcomm options here.
On semiconductors ...
"I did want to mention that implied volatility in a number of the semiconductors was elevated yesterday, not only on back of the defesniveness in Qualcomm and Nokia, but also Corning's warning of a softer demand for flat-screens, so keep an eye on implied volatility in the semiconductor names, as well as National Semiconductor [NSM
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], which reports earnings on Friday, which could also explain why we saw the 14 cent spike in implied volatility in National Semiconductor calls, National Semiconductor options yesterday. I did want to mention also that the volatility that we saw yesterday tended to favor the calls by a factor of about two and a half."
Check National Semi options here.
You can see Darst's full comments in the video.
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