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Tuesday, August 16, 2022


Contrarian Plays Payoff As 3D Systems Shares Stage Intraday Rebound


Today’s tickers: DDD, KMB & CMP

DDD – 3D Systems Corp. – Shares in the provider of 3D content-to-print solutions were hit hard on Monday after the company reported fourth-quarter revenue below analyst expectations. The stock fell as much as 20% to $30.28 in the first 30 minutes of the trading session, but has since rebounded somewhat to trade 7.8% lower on the day at $35.00 as of 12:05 p.m. ET. Options traders anticipating a rebound in DDD shares in the near term snapped up weekly calls on the stock this morning. It looks like traders picked up around 450 contracts at both the Mar. 01 ’13 $31.67 and $33.33 striking prices at average premiums of $1.41 and $0.69 each, respectively. The strong intraday recovery in shares of 3D Systems now finds these upside call options changing hands at $4.20 and $2.70 apiece as of 12:15 p.m. in New York to the benefit of early-bird buyers of those contracts. Meanwhile, options players bracing for further declines have seen the value of bearish positions decline with the rebound in DDD shares. Upwards of 800 puts traded at the Mar. 01 ’13 $30 strike during the first half of the session, with much of the volume purchased for an average premium of $0.55 apiece in the early going. Premium required to purchase the $30 strike weekly puts has halved intraday to $0.25 per contract as of 12:20 p.m. ET.

KMB – Kimberly-Clark Corp. – Bullish options are changing hands on the operator of well-known consumer hygiene brands, including Kleenex and Scott, with shares in Kimberly-Clark rising 1.5% to a record high of $95.90. The company last week raised its quarterly dividend by 9.5% to $0.81 a share. Options traders looking for shares in the name to add to the more than 13% rally since the end of 2012 picked up March expiry calls on the stock this morning. Traders stepped in the purchase around 500 of the Mar. $97.5 strike calls on KMB this morning for an average premium of $0.23 apiece, and may profit at expiration next month should shares rise 1.9% over today’s high of $95.90 to exceed the average breakeven price of $97.73. Time and sales data suggests the Mar. $97.5 strike calls were also in demand at the end of last week, with around 2,000 contracts purchased for an average premium of $0.10 each. Overall options volume of around 27,000 contracts on Kimberly-Clark this afternoon is roughly twice the stock’s average daily options volume of around 13,500 contracts as of 1:00 p.m. ET.

CMP – Compass Minerals International, Inc. – Shares in the maker of highway deicing salt are bucking the trend today, up 2.0% at $76.32 as of 1:00 p.m. ET, following comments from the company at the BMO Capital Global Metals & Mining Conference this morning. Call buying on Compass Minerals straight out of the gate this morning suggests one or more traders is preparing for shares in the name to rise in the near term. Upwards of 1,200 now in-the-money calls at the Mar. $75 strike traded against previously existing open interest of 217 contracts. It looks like most of the contracts were purchased for an average premium of $1.27 apiece in the early going, implying an average breakeven point on the upside at $76.27 through March expiration. Options volume of 1,278 contracts on Compass Minerals today is substantial versus the stock’s average daily options volume of around 52 contracts.


Caitlin Duffy
Equity Options Analyst

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