Here's What The Options Market Expects From Netflix, IBM And United Continental
Netflix, Inc. (NASDAQ: NFLX), International Business Machines Corp. (NYSE: IBM) and United Continental Holdings Inc (NYSE: UAL) will report Q3 results after the market closes on Monday. Ahead of the announcements, Benzinga spoke with TD Ameritrade Chief Strategist JJ Kinahan about options flow in these stocks.
The expert first went into the online video champion. The market is expecting a move of about 9.5 percent, as per what the options activity suggests, Kinahan stated.
Another interesting thing to note in relation to Netflix is that, “if you look at the volume, not only today but over the last few days, you see both the $100 calls and [$100] puts are popular buys, which isn’t a big surprise,” he continued. “But on the calls side, particularly today, the $102 calls have been a big buy.” Moreover, the $102 calls also saw plenty of sellers, the analyst supplemented. “There was also one that was part of a big spread, where they sold the $102's and bought the $110s'.”
Both calls and puts traded at more than two times their normal volume on Monday, Kinahad added. “You hear 9.5 percent and you think, ‘Oh my God, that’s crazy volatility,’ but one thing to keep in mind [is that], if you look at where the volatility has been for the last 52 weeks, the implied volatility right now is only at the 52nd percentile.”
Kinahan moved on to discuss options activity in the Big Blue, which the market expects to deliver a 3.5 percent move on their earnings report.
The firm recently saw some buying activity in the $165 calls, quite far out of the money, Kinahan went on. “I don’t know if there’s people playing for sort of a home run or what it may be, so that’s to be seen,” he explicated.
IBM is seeing two times the amount of normal calls and three times the amount of normal puts trading on Monday, and the implied volatility is above the 56th percentile, he concluded.
Finally, Kinahan shared some insight into United Continental, which is expected to move by approximately 2.5 percent on its earnings report.
“We are seeing some $53 put buyers there; so… right at the money,” he expounded. “On the calls side, there’s no great pattern one way or the other, but last week, we did have some $55 call buyers,” he ended.
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Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.
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