Cheating With Partial Options Hedges

Andrew Wilkinson submits: Materials Select Sector SPDR ETF (XLB) – Options traders are initiating bearish strategies on the XLB, an exchange-traded fund designed to track the performance of the Materials Select Sector of the S&P 500 Index, with shares of the fund currently trading just 0.05% lower on the day at $38.43 as of 12:25pm.

Andrew Wilkinson submits: Comcast Corp. (CMCSA) – Bullish traders are piling into call options on Comcast Corp. today after the cable provider received an upgrade to ‘outperform’ from ‘market perform’ with a 12-month target share price of $26.00 at Sanford Bernstein. Shares in Comcast Corp.

John Abbink submits:Members of the option community have for some years touted implied volatility as the “new asset class,” so it was probably inevitable that their creative energies would turn to implied correlation as the “new, new asset class.” Volatility is relatively easy to trade, using options straddles, for example, and the CBOE’s 2003 launch of the “new” VIX Index and related derivatives, which are essentially just synthetic straddles, simply offered

Bill Luby submits: The CBOE Futures Exchange (CFE) announced today that it will begin trading weekly options on the VIX as of Tuesday, September 28. Please note that unlike standard monthly VIX options which expire on Wednesdays, the weekly VIX options will expire on Fridays, as is the case with other weekly options.

Andrew Wilkinson submits: Activision Blizzard, Inc. (ATVI) – The producer of online, console and hand-held games received a vote of confidence by one large options player anticipating bullish movement in the price of its shares through expiration in January 2011. Activision’s shares rallied 2.12% to $12.05 in the first half of the trading session.

Andrew Wilkinson submits: Oil Services HOLDRS (OIH) – Shares in the Oil Services HOLDRS Trust are up 0.50% in the final hour of trading to secure an intraday- and new 52-week high of $147.34. One options player expecting shares to continue to hit new highs through February expiration initiated a debit call spread.

Andrew Wilkinson submits: Ford Motor Co. (F) – The automaker’s shares edged 2.45% lower this afternoon to $15.80, but investors expecting to see Ford rebound and rally in the next few months initiated bullish plays using put and call options expiring in February 2011.