(ADCT) ADC Telecommunications Dips on Weak Outlook

D.R. Horton (NYSE: DHI) had a really bad trading session today in which it lost 15.35%. The home builder's foundations were shaken after it posted bad earnings report. It had a huge volume of $35.88M in comparison to its average volume of $8.37M.

Seahawk Drilling, Inc. (NASDAQ:HAWK) declined 14.35% to $22.57. It had a volume of $1.21M.

Novavax, Inc. (NASDAQ: NVAX) fell 13% at $3.28 after announcement that a price for its public offering of 6.8 million common shares is $3.30 each.

After moving sideways for a while Ruth's Hospitality Group, Inc. (NASDAQ: RUTH) dropped 12.04% to $2.41. RUTH had a volume of $2.23M and its market capitalization is $58.26.

Investors reacted badly on the ADC Telecommunications' (NASDAQ: ADCT) earnings report. ADC Telecommunications (ADCT) posted a loss of 20 cents per share and its stock fell 10.99% to $5.91.

Dell Inc. (NASDAQ: DELL) posted disappointing results and dropped 9.96%. DELL also dragged down other stocks in the tech sector.

Today’s tickers: WFC, IYT, RYL, YHOO, XLE, MU, ADCT, KBH, DELL, NE & GPS

WFC - Wells Fargo & Co. – Shares of the financial holding company surrendered 1.5% today to stand at $27.88. One investor initiated a sold straddle on WFC in the April 2010 contract. The trader sold 10,000 calls at the April 32 strike for 1.59 apiece in conjunction with the sale of 10,000 now in-the-money puts at the same strike for 5.81 each. The gross premium on the transaction amounts to 7.40 per contract. The investor will retain the full premium if shares settle at $32.00 by expiration. The premium received acts as a buffer against losses in the event that shares swing in either direction away from the $32.00-level. However, the trader will accumulate losses if shares breach the upper breakeven price of $39.40, or if shares decline beneath the lower breakeven point at $24.60, by expiration in April.

IYT - iShares Dow Jones Transportation Average Index ETF – The exchange-traded fund, which measures the performance of the transportation sector of the U.S. equity market, appeared on our ‘hot by options volume’ market scanner this afternoon after one investor initiated a bearish put play. Shares of the fund moved 0.5% lower to $70.53 during the session. The trader established a put spread by purchasing 5,000 puts at the December 70 strike for 1.80 each, and by selling the same number of puts at the lower December 65 strike for 40 cents apiece. The net cost of the trade amounts to 1.40 per contract and provides downside protection beneath the breakeven price of $68.60 down to $65.00 through December’s expiration.

RYL - The Ryland Group, Inc. – Shares of homebuilder and mortgage-finance company, Ryland Group, declined nearly 4% this afternoon to stand at $18.86. Investors exchanging options on the stock today spread pessimistic sentiment through to expiration December. Traders sold 10,000 calls at the December 19 strike for an average premium of 1.10 apiece. The full 1.10 premium pocketed by investors is retained in full as long as shares of RYL remain below $19.00 through expiration day. Call-sellers do not seem to expect that shares of Ryland will recover before the start of 2010.

YHOO - Yahoo!, Inc. – We observed two different option strategies in play on Yahoo this afternoon. A large-volume sold strangle in the January 2011 contract suggests shares are likely to remain stagnant through expiration. The transaction involved the sale…

4:08 PM, Nov 20, 2009 --

• DJIA down 14.28 (0.14%) to 10,318.16.
• S&P 500 down 3.52 (0.32%) to 1,091.38.
• Nasdaq down 10.78 (0.50%) to 2,146.04.

GLOBAL SENTIMENT

Energy Select Sector SPDR (XLE) – The exchange-traded fund, which mirrors the performance of the Energy Select Sector of the S&P 500 Index, popped up on our ‘most active by options volume’ market scanner after a butterfly spread unfurled its wings in the December contract. Shares of the XLE are off 1.5% to stand at the current price of $56.30. The spread indicates one bearish investor expects shares of the fund to gravitate lower by expiration next month. The trader established the pessimistic play by purchasing 5,300 in-the-money puts at the December 57 strike for a premium of 2.47 apiece [wing 1] and by picked up another 5,300 puts at the lower December 51 strike for 66 cents premium each [wing 2]. Finally, the trader sold 10,600 puts at the central December 54 strike for a premium of 1.27 apiece [body].The net cost of the transaction amounts to 59 cents per contract and yields maximum potential profits of 2.41 each if shares settle at $54.00 by expiration. Profits begin to amass if shares slip beneath the breakeven point at $56.41.

Micron Technology, Inc. (MU) – Options activity on the manufacturer of semiconductor devices suggests shares may recover slightly by expiration in December. Micron’s share price suffered significant declines throughout the latter portion of the trading week, and continued lower today by 1.25% to $7.03. Bank of America’s downgrade of the sector was largely responsible for a more than 4% slide on Thursday. A ratio bullish risk reversal by one investor offers a glimmer of optimism on the stock. It appears the trader sold 10,000 puts at the December 7.0 strike for 45 cents premium in order to offset the cost of buying 20,000 calls at the higher December 8.0 strike for 15 pennies apiece. The investor pockets a net credit of 15 cents per contract, which he retains in full as long as shares remain higher than $7.00 through expiration. Additional profits are available in the event that the stock rallies 14% from the current price to surpass the breakeven point at $8.00.

eFuture Information Technology Inc. (NASDAQ: EFUT) moved down 28% to $7.20 in the morning trading hours after EFUT announced its financial results for the second quarter ended June 30, 2009. The 52 week trading range for EFUT is $2.51 - $13.84.

HF Financial Corp. (NASDAQ: HFFC) is currently trading at $8.20, declined by $1.55 or 15.90% on 35K shares in the morning trading hours after HF Financial announced the pricing of its public offering Of 2.5 million common shares at $8.00 per share.

DryShips Inc. (NASDAQ: DRYS) declined 3.37% to $6.31 on 7.28 million shares. So far this year, DRYS is down over 40%. The 52 week trading range for DRYS is $2.72 - $17.35. Yesterday, DryShips Inc. announced the pricing of its $400 million convertible senior notes offering.

Dell Inc. (NASDAQ: DELL) plummeted 8.19% to $14.55 on 2.28 million shares. Yesterday, Dell reported net income of $337 million or $0.17 a share as compared to $727 million or $0.37 a share, a year ago quarter. In the last six months, DELL gained over 26%.

Vodafone Group Plc (ADR) (NASDAQ: VOD) tumbled 1.77% to $22.15 on 834K shares after The 52 week trading range for VOD is $15.46 - $23.85. Vodafone Spain has appointed Cristina Rivas Saiz as its marketing director for the enterprise business unit in Spain. In the last six months, VOD gained over 18%.

BioCryst Pharmaceuticals, Inc. (NASDAQ: BCRX) plunged 6.54% to $9.72 on 1.09 million shares. Yesterday, BioCryst Pharmaceuticals announced pricing of a public offering of 5,000,000 shares of its common stock at $9.75 per share. So far in 2009, BCRX gained over 609%.

ADC Telecommunications (NASDAQ: ADCT) declined 14% to $5.69 on 1.38 million shares. Yesterday, ADC Telecommunications reported that it lost $19.2 million in the fourth quarter. So far this year, ADCT is up only 4%.

Golden Green Enterprises Ltd (NASDAQ: CHOP) is another stock down 5.51% and now trades at $5.15, on 136K shares. In the last six months, CHOP gained only around 2%.