Lam Research Ooptions Draw Optimistic Crowd

Today’s tickers: LRCX, AZN, BRCD, F, MTG, RSH & FL LRCX - Lam Research Corp. – Contrarian option players initiated bullish trades on Lam Research Corporation today even though shares are trading 7% lower to $32.79. Investors sold nearly 5,000 in-the-money put options at the March $35 strike for an average premium of $1.71 apiece. Put-sellers are perhaps positioning for a rebound in the price of the underlying stock ahead of expiration next month. Traders keep the $1.71 premium per contract on the sale only if LRCX’s shares rally above $35.00 by expiration day. Short-put sellers receive the premium in exchange for bearing the risk that the puts land in-the-money at expiration and shares of the underlying stock are put to them at an effective price of $33.29 apiece. Optimism spread to the April $35 strike where 1,000 calls were picked up for an average premium of $1.15 apiece. Lam Research’s shares must jump 10.25% from the current value before call-buyers start to accumulate profits above the breakeven share price of $36.15. The increase in demand for options on LRCX today boosted options implied volatility on the stock about 11.1% to 37.54%. AZN - AstraZeneca PLC – A bearish risk reversal was initiated on pharmaceuticals firm, AstraZeneca, today despite news the firm is raising its 2010 earnings outlook to $5.90-$6.30 per share up from $5.75-$6.15 per share. AstraZeneca improved its 2010 outlook after revealing plans to pay $783 million to settle a tax dispute with United Kingdom regulators. Shares were up earlier in the session, but are currently trading lower by less than 0.10% to $43.51. The pessimistic play involved the sale of 5,000 calls at the July $50 strike for a premium of $0.60 apiece, spread against the purchase of 5,000 puts at the lower July $40 strike for a premium of $1.35 each. The net cost of the reversal transaction amounts to $0.75 per contract. The investor responsible for the trade is perhaps hoping to accumulate profits to the downside should the stock trade beneath the breakeven share price of $39.25 by expiration in July. BRCD - Brocade Communications Systems, Inc. – The supplier of networking equipment forecast maximum 2010 earnings of $0.58 per share, which underwhelmed analysts expecting $0.60 per share. A plethora of analyst downgrades combined with the lower-than-expected 2010 profit forecast pummeled Brocade’s share price down 23.50% to $5.32 today. BRCD was downgraded to ‘hold’ from ‘buy’ at Stifel Nicolaus and…