Blogging Options: CBOE Morning Update 7.1.14

Rain pounded the midwest last night, so hard that Chicago’s O’Hare Field was cut off from inbound (auto) traffic for 8 hours.  Two lanes now open.  World Cup match with US scheduled to begin at today’s closing bell shouldn’t affect trading.  Chinese economic news was favorable overnight, ISM report released 30 minutes into trading day.  Volatility as an asset class

Netflix (NFLX) is up $15.88 to $456.48 in the premarket after being upgraded at Goldman to Buy from Neutral. The firm believes Netflix can exceed subscriber growth expectations as it leverages connected device growth and continues to expand internationally. The analyst expects margin growth to be driven by scaling benefits in customer acquisition, content sourcing and technology. Price target raised to $590 from $380.   Overall option implied volatility of 39 is near its 26-week average of 40.

BNP Paribas (BNPQF) is settling its “sanctions lawsuit” for $8.9B, after pleading guilty to two criminal charges of falsifying business records and conspiracy. The bank has also agreed to suspend parts of its U.S. dollar clearing operations for one year. The ban will start on January 1, 2015, and will greatly impact the bank’s oil and gas finance business. Financial Select Sector overall volatility at 14 is below its 26-week average of 16.

Hormel (HRL) closed at $49.35 into announcing the purchase of CytoSport Holdings, maker of Muscle Milk protein drinks and other high-protein products, for $450M. Overall option implied volatility of 17 is at its 26-week average.

Options expected to be active @ CBOE: NFLX HRL AAPL AA MSFT

CBOE S&P 500 BuyWrite Index (BXM) at 1079.56, compared to its 10-day moving average of 1078.38

CBOE S&P 500 Short-Term Volatility Index (VXST) at 11.17, compared to its 10-day moving average of 11.01. VXST is a market-based gauge of expectations of 9-day

iPath S&P 500 VIX Short-Term Futures (VXX) is recently down 14c to 28.46

CBOE Volatility Index (VIX) closed at 11.57, compared to its 10-day moving average of 11.33 and its 50-day moving average of 12.25

CBOE Nasdaq-100 Volatility Index (VXN) at 12.21, 50-day MA 14.88

SPDR S&P 500 ETF Trust (SPY) is recently up 50c to $196.22 on the first day of the quarter.

Calls with increasing volume at CBOE:

QQQ 9/20/2014 98.63 31K contracts
MSFT 9/20/2014 44 18K
BAC 1/17/2015 22K 17K
SPY 6/30/2014 196 15K
AAPL 7/3/2014 93 12K
MON 7/19/2014 120 10K
CSCO 9/20/2014 27 9K