Andrea Kramer (akramer@sir-inc.com)
10/28/2009 11:55:18 AM
Saks Incorporated (SKS: sentiment, chart, options) attracted a slew of call speculators on Tuesday, as investors prepare for the Nov. 5 release of the retailer's latest sales figures. During the course of the session, the security saw roughly 6,700 calls cross the tape – more than quintupling its average daily volume of fewer than 1,300 calls, and almost 672 times the number of SKS puts traded.

Garnering the most attention was the equity's January 2010 5 call. The at-the-money option saw about 5,600 contracts change hands on open interest of fewer than 1,900, suggesting that a healthy amount of the activity consisted of new positions. In fact, the 5 strike is now home to peak call open interest in the January 2010 series, with almost 7,250 contracts in residence.

Yesterday's preference for calls mimics the recent trend on the International Securities Exchange (ISE). During the past couple of weeks, option players on the ISE have bought to open nearly five times more SKS calls than puts, as indicated by the stock's 10-day call/put volume ratio of 4.63, in the 66th annual percentile. In other words, traders on the exchange have purchased SKS calls at a faster pace only one-third of the time during the past year.

The shares of SKS have added almost 35% since the start of the year, but were recently rejected at their 20-month moving average. At last check, the stock has surrendered 26 cents, or 4.4%, to flirt with the $5.65 level.

link: http://www.schaeffersresearch.com/market...