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08:28PM (15 mins delay)
Oct 06, 2009 - 12:11 PM EDT
NutriSystems, Inc. (NTRI) – Shares of the provider of weight management products and services are soaring 21% higher today to $18.26, after news reports on Monday revealed its 14-day Starter Program will be offered through 3,200 Wal-Mart stores. NutriSystems opened at a new 52-week high of $18.50 this morning, a 25 cent improvement over the old high of $18.25 attained back on September 22, 2009. Option traders hoping to catch the wave of bullish momentum on NTRI demanded call options in the November contract. Increased call activity and greater investor uncertainty over the future price of NutriSystems sent implied volatility on the stock up 14% to an intraday high of 68%. Approximately 1,500 calls were picked up at the November 20 strike for an average premium of 88 cents apiece. Investors holding the calls are hoping shares of NTRI rally another 14% from the current price to the breakeven point at $20.88 by expiration next month. Shares have not traded higher than the breakeven price since May 19, 2008, when the stock was at $21.08.
Gold Fields Ltd. ADR (GFI) – The rise to a record spot price of gold at above $1,035 per ounce today has call options in several gold mining companies in demand. Today’s push higher comes on account of a London-based newspaper article that predicts the dollar’s role in crude oil pricing will have vanished by 2018. The story is prompting short-selling of the already uncomfortable dollar and creating a vacuum in commodity prices adding upwards momentum to an already jittery gold market, concerned that the role of the dollar is set to diminish. In turn that promotes the value of hard assets. Gold Fields shares are trading at $14.88 and higher by 6.7% today. Meanwhile options on the company are trading at more than six-times the average turnover and a call-to-put ration of 24 clearly indicates that bullish plays are the order of the day. The most commonly populated target today is at the January 17.5 strike where so far more than 23,000 calls have changed hands at premiums valued of 1.00. While Gold Fields is today trading at its best price since April 2008, the 17.5 strike price was last reached in January 2008. We also see some selling of higher strike call options possibly used to help fund bullish purchases at lower strikes.
Source: Seeking Alpha (Oct 06, 2009 - 12:11 PM EDT)
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