STOCKS NEWS US-Proctor & Gamble options suggest more upside

Stocks on the move Real-time Equity news U.S. stock market report 1429 ET 06Nov2009 Proctor & Gamble options play suggests more gains ------------------------------------------------------------------------------ Shares of household products maker Proctor & Gamble Co rose 1.11 percent to $61.14. In the options patch, the bullish action on the stock suggests that one investor expects shares to continue to rally ahead of November expiration, said Andrew Wilkinson, senior market analyst in a note to clients. The trader bought 10,000 calls at the now in-the-money November $60 strike for a premium of $1.39 each, and simultaneously sold 10,000 calls at the higher November $62.50 strike for 26 cents apiece. The net cost of buying the call spread was $1.13 per contract and yields maximum potential profits of $1.37 each if shares rally up to $62.50 by expiration, he said. Shares need only rally another 2.1 percent from the current price to reach the $62.50-level. Reuters Messaging: [e-mail] 1327 ET 06Nov2009 Liberty Media option play suggests gains ------------------------------------------------------------------------------ One investor appears to have taken an upside bet on media conglomerate Liberty Media Corp's division, Liberty Interactive. Its shares rose 8 cents to $12.10. A block of 11,100 January 2010 $15 calls that hit ask-side was bought for 25 cents a contract. With only 193 contracts of open interest, it appears to be a new position, said WhatsTrading.com option strategist Frederic Ruffy. The transaction was also tied to a block of LINTA shares at $12.07. The trade was initiated before the company is due to report earnings on Monday. "These calls are clearly well out-of-the-money and LINTA hasn't seen $15 in over a year," said optionMonster analyst Chris McKhann in comments on the Web site. Given the January expiration, this doesn't appear to be just an earnings play, and it could be someone protecting short shares. "Regardless, this is big bet on the possibility that LINTA sees that $15 level over the next couple of months," McKhann said. Reuters Messaging: [e-mail] 1312 EST 06Nov2009-JPMorgan upgrades Macy's to "overweight" ------------------------------------------------------------------------------ Shares of Macy's Inc advanced on Friday, after JPMorgan upgraded the retailer to "overweight" from "neutral," citing improving same-store sales and the potential for earnings upside. For details, see The stock rose 5.5 percent to $19.01. Reuters Messaging: [e-mail] 1228 ET 06Nov2009 Option traders turn optimistic on healthcare ETF ------------------------------------------------------------------------------ Option trading in the Health Care Select Sector SPDR fund was positive as investors look for gains into the spring, said optionMonster analyst David Russell in comments on the Web site. OptionMonster's computer model show investors sold the March $27 puts for premiums of 70 to 80 cents and bought the March $29 calls for $1.25 to $1.40. The puts traded more than 16,000 times and the calls about half as much. Volume exceeded open interest in both strikes. The XLV rose 12 cents to $29.08 in afternoon trade. "Today's buyers may expect the sector to rebound as health-care reform efforts struggle in Congress and because it's a defensive industry group" he said. "The options trades are designed to profit from the XLV moving higher." In the largest transaction, Russell noted 3,700 calls were bought for $1.30 and 3,700 calls were sold for 95 cents. The position would amass a profit if the ETF closes above $29.35 by expiration and lose money below $27. Reuters Messaging: [e-mail] 1149 EST 06Nov2009-Markets flat as upgrades offset jobs data ------------------------------------------------------------------------------ U.S. stocks were flat on Friday, as positive broker comments on such companies as General Electric and Amazon were offset by data showing the unemployment rate soared to 10.2 percent last month, its highest in more than 26 years. Bernstein upgraded both GE and Amazon to "outperform," while Goldman Sachs upgraded Travelers Cos. For details, see The Dow Jones industrial average was flat at 10,007.47, while the S&P 500 was down less than a tenth of a percent to 1,066.25 and the Nasdaq was unchanged at 2,105.56. Reuters Messaging: [e-mail] 1101 EST 06Nov2009-W&T Offshore shares sink after downgrade ------------------------------------------------------------------------------ Shares of W&T Offshore Inc fell on Friday, after the company was downgraded to "hold" from "buy" at Jefferies, which said it saw few near-term catalysts to lift the stock. Jefferies expects the company to go through a 10 percent decline in production in 2010, and said the current commodity price and service cost environment appeared light. For details, see The stock shed 6.7 percent to $10.99. Reuters Messaging: [e-mail] 1041 ET 06Nov2009-Clorox calls turn busy, implied vols up ------------------------------------------------------------------------------ Investors appear to be picking up Clorox Co call options as its shares rose 7 cents to $59.54 and reached a high of $59.95 in morning trading. Overall option volume was six times the average daily turnover with about 12,000 calls traded against only 304 puts so far, Trade Alert data show. Some customers bought-to-open November and December $65 calls on the International Securities Exchange in early trade, according to ISEE data, said WhatsTrading.com option strategist Frederic Ruffy. He noted the November $60 call strikes were the most actives, with 4,700 contracts traded and 67 percent trading ask-side. The stock's average implied volatility is up to 25.5 percent, from about 24.7 percent late on Thursday. Reuters Messaging: [e-mail] Keywords: MARKETS STOCKSNEWS COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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