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ONEOK, Inc. (OKE) Options In Focus As Shares Spike

ONEOK, Inc. (NYSE:OKE) – Shares in ONEOK, Inc. (NYSE:OKE) are ripping higher on Thursday, rallying as much as 22% to a near three-month high of $52.32 during morning trading after the company said it plans to spinoff its natural gas distribution business. Options activity on ONEOK, Inc. (NYSE:OKE) this morning suggests some traders may be taking profits given the strong move in the shares today. Call open interest in the August expiry options is greatest at the $45 strike, with 5,280 open contracts. A review of time and sales data for the Aug $45 calls indicates most of the contracts were likely purchased for an average premium of $0.525 each the morning of July 8th when shares in ONEOK, Inc. (NYSE:OKE) were hovering around $39.63. The sharp move in the price of the underlying today pushed premium on the Aug $45 strike calls up to as high as $6.80 during the first half of the session. Upwards of 4,500 of the $45 calls have changed hands today, with the bulk of the volume sold for an average premium of $4.59 each, or roughly nine times as much as the $0.525 average premium paid earlier this month. Meanwhile, options traders positioning for shares in the name to extend gains in the near term snapped up around 1,000 calls at each of the Aug $50 and $55 strikes for average premiums of $1.83 and $0.85 each, respectively. ONEOK, Inc. (NYSE:OKE) is scheduled to report second-quarter earnings after the close on July 30th. Shares in ONEOK, Inc. (NYSE:OKE) are currently off their highest level of the session, but continue to stand up 18.5% on the day at $50.75 as of 12:20 p.m. ET.

Seagate Technology PLC (NASDAQ:STX)Seagate Technology PLC (NASDAQ:STX) – Options changing hands on Seagate Technology PLC (NASDAQ:STX) today suggest some traders may be positioning for a near-term rebound in the price of the underlying, with the stock down 4.2% this afternoon at $42.34 as of 12:30 p.m. ET, and off roughly 10% since the start of the week. The stock was hit hard mid-week following the company’s fourth-quarter earnings report, though shares have recovered off of their lowest levels. Traders looking for the price of the underlying to continue to recover ahead of the weekend snapped up weekly calls on the stock. More than 4,800 of the Jul 26 ’13 $42.5 strike calls traded this morning against open interest of 307 contracts. It looks like most of the volume was purchased for an average premium of $0.30 apiece, thus positioning buyers to profit at expiration should shares top the average breakeven price of $42.80. Roughly 2,000 of the Jul 26 ’13 $43 strike calls appear to have been purchased for an average premium of $0.13 each, while roughly 900 of the $43.5 strike weekly calls were picked up at an average premium of $0.12 each. Overall options volume on Seagate Technology PLC (NASDAQ:STX), currently approaching 38,000 contracts in early afternoon trading, is more than twice the stock’s average daily volume of around 15,000 contracts.

Spirit AeroSystems Holdings, Inc. (NYSE:SPR) – Shares in Spirit AeroSystems Holdings, Inc. (NYSE:SPR) are moving higher today, up as much as 11% this morning to $26.71, on speculation GKN Plc may make a $5 billion bid to takeover the aerospace supplier. The chatter sparked heavier than usual trading traffic in Spirit AeroSystems Holdings, Inc. (NYSE:SPR)’s options, with volume topping 3,750 contracts during the first half of the trading session versus the stock’s average daily volume of around 650 contracts. Some traders appear to be preparing for shares to extend gains, with more than 900 Aug $25 strike calls purchased for an average premium of $2.14 apiece today. The bullish options make money at expiration next month in the event that Spirit AeroSystems Holdings, Inc. (NYSE:SPR)’s shares rally 5.4% over the current price of $25.76 to exceed the average breakeven point at $27.14.

Caitlin Duffy
Equity Options Analyst

The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither Interactive Brokers LLC nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither IB nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance is not necessarily indicative of future results.

This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities or other financial instruments mentioned in this material are not suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue. The information contained herein does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before investing, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

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