"Options market pricing in a X% move on the stock"

you can`t tell much from these, people knew that intc, amr, aapl otm calls were being purchased bigtime head of earnings, expecting a huge move, and they all wasted their money with a week to go before options exp.-----just stick to doing your research on the likelyhood of a blow out earnings release, or a company that is growing like bidu, momentum stock, etc.
 
Quote from a529612:

When an options guru says the market is pricing in a X% move on the underlying stock, does he mean the long straddle premium, say $2 on a $20 stock = 10% move or he's talking about volatility?

Also, is it really possible to predict the next move on a stock just by looking at the options market?
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He is talking able implied volatility.

Theoretical Option pricing model includes the following element: underlying price, option strike, time to expire, interest rate, dividend and implied volatility. Implied volatility is the only unknown that must be derived from the option price.

The traders are saying: I am will to take the risk at this option price because I am anticipating this much % of price movement in the underlying by expiration.

The guru is talking about the impled volatility that translate to price movement range.
 
Quote from thegazelle:

I still watch CBOE TV as it is interesting to watch unusual option activity unfold.
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Well I never watched it but just did and almost missed that 10-sec commercial for optionshouse.com.

$9.95 flat fee, unlimited contracts. Am I dreaming?

Does anybody at all watch this CBOE tv? Heck this is the biggest thing since Black-Scholes!

Still have to read the fineprint :)
 
OK, here is an example for you guys that was mentioned yesterday. Heavy call buying in SNDK, presumably ahead of earnings tonight. Specifics are as follows :

Apr 45 call block of 10,000 @ 11:41 EST for $3.2 mil
Apr 55 block of 14,550 @ 11:44 EST for $1 mil

I'm not saying they are going to smash estimates, just pointing out the option activity. Notice that these are not front months, but are a little ways out. I'll post again after earnings tonight.
 
Quote from thegazelle:

OK, here is an example for you guys that was mentioned yesterday. Heavy call buying in SNDK, presumably ahead of earnings tonight. Specifics are as follows :

Apr 45 call block of 10,000 @ 11:41 EST for $3.2 mil
Apr 55 block of 14,550 @ 11:44 EST for $1 mil

I'm not saying they are going to smash estimates, just pointing out the option activity. Notice that these are not front months, but are a little ways out. I'll post again after earnings tonight.
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How do you know it was buying?
 
Read earlier in the thread its explained already...

Obviously SNDK took quite a dive last night, thats why I also said before that I don't follow this religiously, I really just observe.
 
Quote from thegazelle:

Read earlier in the thread its explained already...

Obviously SNDK took quite a dive last night, thats why I also said before that I don't follow this religiously, I really just observe.
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Oh ok, I didn't realize you talking about the CBOE TV/heat seeker.
 
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