STOCKS NEWS US-China ETF calendar call spread eyes gains

Stocks on the move [HOT-RTRS] Real-Time Equity news [U E]

U.S. stock market report [.N]
1724 ET-06April2009-China ETF calendar spread looks for rally in 2010
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Shares of the iShares FTSE/Xinhua China 25 Index exchange-traded fund
(FXI.P) fell 1 cent to $30.94. In the options market, one trader enacted a
bullish calendar spread, looking for a significant rally in the ETF at the
start of 2010, said Interactive Brokers Group analyst Andrew Wilkinson. The
investor sold 8,500 calls at the May $32 strike price for an average premium of
$1.60 and repurchased 8,500 calls at the January 2010 $40 strike price for
$1.70 each. The trader gets a credit of 10 cents for rolling the position
forward while bearing the risk that shares rise above $32 as he is short 8,500
calls at the May $32 strike, he said. This trade implies the investor does not
see shares rallying above $32 by May expiration but does want to see shares
rise by 31 percent to break through the January $40 strike by January
expiration.

Meanwhile, traders bought 15,000 puts at the May $25 strike for 60 cents
apiece along with some 10,000 puts which traded to the middle of the market at
the August $25 strike for $2 each.

Reuters Messaging: doris.frankel.reuters.com@reuters.net
(Corrects RIC in first item to UNP.N)

1649 ET-06April2009-Option traders bet on higher volatility in Union
Pacific
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Union Pacific Corp (UNP.N) option volume was double the normal levels as
11,000 puts and 15,000 calls traded, according to Trade Alert. Shares of
railroad fell 4.4 percent to $44.06 after rallying 9.9 percent this past
Thursday along with similar gains experienced by other rail companies, said
Andrew Wilkinson, market analyst at Interactive Brokers Group. One player
seemed to be looking for volatility to increase on the stock with the purchase
of a May strangle, he said. At the May $43 strike price, 5,000 puts were bought
for $3.70 each along with the purchase of 5,000 calls at the May $44 strike for
3.60 apiece. The net cost of the strangle was $7.30 and yields effective break
even points at $35.70 on the downside and at $51.30 on the upside. This
investor will begin to make money if shares can swing outside of the break even
points. Using a reference price of $44.06, this would require either a rally of
16.4 percent or a decline in shares of 19 percent. Option implied volatility
stood at 68 percent, up from Friday's 61 percent reading, he said.

Reuters Messaging: doris.frankel.reuters.com@reuters.net
1615 ET 06Apr2009 RTRS-US STOCKS-Wall St ends lower, weighed by bank unease
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U.S. stocks ended lower on Monday, halting a four-day run-up, as a warning
from a prominent analyst, Calyon's Mike Mayo, rekindled worries about banks,
while a potential collapse of a takeover of Sun Microsystems hurt sentiment in
the technology sector.

Even so, the market ended well off its worst levels, with some investors
encouraged by a reassuring assessment of the bank sector from another closely
followed bank analyst, Meredith Whitney. For details, see [ID:nWEN6943]

For more details, see [.N]

Reuters Messaging: ellis.mnyandu.reuters.com@reuters.net
1557 ET 06April2009-Players scoop up TLT calls, likely betting on bond rally
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Shares of the Barclays Capital 20+ Year U.S. Treasury Index (TLT.P) fell 33
cents to $102.59 in late trade as bonds limp into the close. But some option
players seem to be preparing for a big bond rally over the next two weeks, said
Frederic Ruffy, options strategist at WhatsTrading.com. The top trade in the
exchange-traded fund was 5,000 April $107 calls at the offer for 35 cents
traded this morning. ISEE sentiment data on the ISE confirm the trade is an
opening call buy. The activity continued throughout the day and 11,219 TLT
April $107 calls traded, Reuters data show. The TLT tracks bonds with longer
maturities in the Treasury market. Buying calls on the TLT reflects a bullish
view on bonds. When the fund's stock price goes up, interest rates and yields
are falling while government bond prices are rising. Conversely, the ETF's
stock price drops when interest rates and yields rise while bond prices fall.

Reuters Messaging: doris.frankel.reuters.com@reuters.net
1458 ET 06April2009-TARP repayments seen hobbling lending, recovery
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"Because Congress has now targeted CEO pay, banks are focused on repaying
TARP (bailout money) more than lending, even if they have to access capital to
do so," said Marc Pado, U.S. market strategist AT Cantor Fitzgerald & Co in San
Francisco.

"Now you're going to have the banks focused on repaying TARP and getting
Congress out of their business, rather than spurring the economy.

"They (Congress) have now defeated the very purpose they were injecting the
money for in the first place. It's that this is going to stop the economy from
recovering, but it's going to certainly slow the pace of the recovery."

Reuters Messaging rm://ellis.mnyandu.reuters.com@reuters.net
1458 ET 06April2009-Tech sector Q1 job cuts jump 27 pct vs Q4 -report
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Firms in the United States technology sector announced planned job cuts
totaling 84,217 in the first quarter, up 27 percent from 66,312 in the previous
quarter.

It was the largest quarterly job-cut tally for the sector since 2002, when
133,511 layoffs were announced in the fourth quarter, according to a report
released on Monday by global outplacement firm Challenger, Gray & Christmas,
Inc.

Despite the increase, quarterly tech job cuts remain well below the levels
reached during the dotcom collapse that resulted in 1,163,742 tech-sector job
cuts in 2001 and 2002.

During that period, employers announced an average of 145,467 job cuts each
quarter, the outplacement firm added.

Reuters Messaging rm://ellis.mnyandu.reuters.com@reuters.net
1446 ET 06April2009-Infosys Technologies gets bearish put spreader
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U.S. listed shares of Indian information technology company Infosys
Technologies Ltd (INFY.BO) (INFY.O) fell 3.13 percent to $28.15 in late trade.
Infosys appeared at the top of Interactive Brokers Group's "hot by options
volume" market scanner after one player initiated a ratio put spread in the
April contract, said Interactiver Brokers' market analyst Andrew Wilkinson in a
note. At the April $25 strike price, 10,000 puts were sold for a premium of 50
cents apiece while 5,000 puts were purchased at the April $27.50 strike for
$1.30 each. The net cost of the bearish trade amounted to 30 cents and yields a
maximum potential profit of $2.20 if shares fall to $25 by expiration. Shares
would need to fall by at least 4 percent from the current price in order to
breach the break even point at $27.20, the price at which the investor begins
to amass profits on the downside, Wilkinson added.

Reuters Messaging: doris.frankel.reuters.com@reuters.net
1412 ET 06April2009-March same-store sales to fall 0.3 pct: TR data
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Same-store sales are expected to have dropped 0.3 percent in March,
compared with a 0.7 percent drop in March 2008, according to the Thomson
Reuters same-store sales index. Almost all the strength is expected to come
from discount retailer Wal-Mart Stores (WMT.N). Excluding Wal-Mart, the largest
retailer in the index, comparable sales are expected to tumbled 4.7 percent
year-over-year.

The discount retail sector is the only group expected to post positive
sales growth. When Wal-Mart is included, the group is expected to post growth
of 2.6 percent. Excluding Wal-Mart, the sector is expected to report flat
sales.

The S&P Retail Index .RLX fell 1.9 percent to 308.10 on Monday.

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net