The vix is relatively stable today holding below 20 on a day where Oil is in the news again, up over 119 per barrel amid supply concerns with BP Plc’s shut down its north seas forties pipeline due to a strike at it Scotland refinery and after a weekend where many of us saw an increase closer to $4 per gallon for regular gas here in the US.

 

Earnings are also a bring spot today as companies like HUM and VZ reported good numbers and a good out look

 

With the Mars buyout offer of Wrigley’s options have gained interest in an otherwise dead options chain. Volume in the front month of May has spiked early on the 65s and Interesting the bid ask spread for May is 70 is just under 5 with no volume and the 75’s and 80’s dont offer a bid at all. While the market makers attempt to sort this out the 70’s at 9.40 are seemingly not worth it as the offer from Mars, backed by Berkshire Hathaway is $80 per share and early indications of traders belief of this trade going through has pushed the stock to a day and 52 week high of 77.75. Even the lower strikes of May have a pretty big Bid ask spread of 30 to 40 cents.

 

The June and September calls have increase significantly with the bulk of their open interest coming in the month of April. An interesting note here is the amount of volume in the 80 options of June at almost 750 contracts today with the last price being 0.15 and a decrease from Fridays close. Someone might have been thinking that we were going to get a better pop then we did with this combination today.

 

(WWY: 0.00 0.00 0.00%, cap: N/A)

(BRK-A: 100090.00 0.00 0.00%, cap: 155.0B)

 

With the Yahoo Microsoft dead line passing this Saturday one would think that if you are betting on yahoo to be bought, you might be buying Put options to protect your long side bet. However we are seeing steady volume on the May 30 calls and contract for contract there are more may and June calls compared to the amount of Puts int eh same months. One note of interest though, the volume on the May 22.50 Puts are up 20%.

 

There are still a number of hurdles to over come if Microsoft is to successfully buy yahoo, so I would expect that if

 

(YHOO: 13.00 0.00 0.00%, cap: 18.040B)

(MSFT: 20.76 0.00 0.00%, cap: 184.7B)

 

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