Today’s tickers: YHOO, LVS & MED
YHOO – Yahoo! Inc. – Bearish options changing hands on Yahoo this morning indicate some traders are positioning for shares in the name to continue to selloff in the near term. Shares in YHOO are down 4.75% at $24.00 as of 11:55 a.m. ET amid a retreat in U.S. stocks. Traders snapped up at- and out-of-the-money weekly put options in the early going this morning, picking up around 400 of the Jun 28 ’13 $23.5 strike puts for an average premium of $0.18 apiece and roughly 540 puts at the Jun 28 ’13 $24 strike at an average premium of $0.30 each. Buyers of the $23.5 strike puts stand ready to profit at expiration this week should shares in Yahoo decline another 2.8% to breach the average breakeven point on the downside at $23.32. July expiry put options are also active today, with upwards of 6,000 of the $23 strike contracts in play as of the time of this writing. It looks like one trader purchased the bulk of the Jul $23 strike puts for an average premium of $0.53 apiece. The bearish position starts making money if the price of the underlying slips 6.4% from the current price of $24.00 to settle below the breakeven point at $22.47 by expiration next month. Finally, options traders also looked to the Aug $24 strike puts, picking up more than 3,500 contracts for an average premium of $1.12 apiece. Despite the weakness in YHOO shares today, the stock is still up more than 50% since this time last year.
LVS – Las Vegas Sands Corp. – Weekly put options purchased on Las Vegas Sands ahead of the weekend appear to be paying off for one strategist today, with shares in the name down more than 6.5% at $48.84 today on concerns over the credit crunch in China. Time and sales data suggests one trader picked up roughly 1,000 puts at the Jun 28 ’13 $50 strike on Friday morning for an average premium of $0.40 each. The sharp selloff in shares of the resort casino operator today now find the put options changing hands at more than four times that amount. Trading traffic in the $50 weekly puts indicates the put buyer may have taken profits on the position this morning, with roughly 1,000 of the contracts sold in the early going at a premium of $1.74 each. Meanwhile, traders positioning for shares in LVS to continue to slide this week picked up roughly 2,000 puts at the Jun 28 ’13 $48 strike for an average premium of $0.78 each. Bears positioning for more substantial declines in the price of the underlying purchased around 2,000 puts at the Jul $45 strike at an average premium of $0.79 apiece. Traders long the Jul $45 puts stand ready to profit should shares in Las Vegas Sands slide 9.5% from the current price of $48.84 to breach the average breakeven point on the downside at $44.21 by expiration next month. Overall options volume on LVS is approaching 50,000 contracts just before 1:00 p.m. in New York, roughly 150% of the stock’s average daily volume of around 30,500 contracts.
MED – Medifast, Inc. – Shares in the provider of weight loss products and programs are off 1.4% this afternoon to stand at $25.36 as of 12:35 p.m. ET, but September expiry put options traded on the stock in the early going look for the price of the underlying to drop substantially from the current level during the next few months. Medifast’s shares have dropped 14% since trading up to a six-month high of $29.47 back on June 4th. The most actively traded options contracts on MED today are the Sep $20 strike puts, with 1,020 contracts in play versus open interest of 220 contracts. It looks like one trader purchased most of the puts for an average premium of $0.63 each. The bearish play on Medifast may be profitable at expiration should shares in the name plunge 24% from the current price of $25.36 to trade below the average breakeven price of $19.37.
Equity Options Analyst