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Options Action: Weird Trading in Interactive Brokers

A stock that has seen some of the most volatile swings Tuesday is not a name that has dominated headlines during the economic crisis: Interactive Brokers.

The online brokerage opened just fine at $18, only to sell off to a new low of $15.10; it now hovers around the previous 52-week lows of $17. The options action has been in the puts and has lit up the OptionMonster systems that track unusual trading activity. It's unclear what is driving the trading, as there is no obvious news.

The IBKR November 15 puts, which expire Friday, have traded in a range of $0.20 to $1.10. Volume has been high, with the November 15 puts doubling the 20-day average of 1,126 and the December 15 puts approaching the entire daily average by midday.

  • IBKR: Options Chain
  • IBKR: Analyst Recommendations

The November put options face an extremely tight window of just three more days to perform.

But some might be willing to trade them around $0.40 for a high risk/reward ratio.

Disclosure:

OptionMonster's parent company owns a competing online brokerage called Trade Monster.

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Jon 'DRJ' Najarian is a professional investor, CNBC contributor, and cofounder of OptionMonster.

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Rival Online Brokerages:

E-Trade Financial

TD Ameritrade

Charles Schwab

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Disclaimer