Friday Options Outlook: CRM, MNST, IR, LPX, MRVL, JCG, CIT, BUD, DELL, MSFT

May 30, 2008

Salesforce (CRM) – Have takeover rumors come home to roost at Salesforce.com? The company, whose so-called “Platform as a Service” concept allows businesses to develop online applications without costly infrastructure investments, received positive attention in a Minyanville column yesterday touting it as a possible takeover stock, expressing wonderment that someone of Larry Ellison’s caliber hadn’t yet spoken for the company. The first inklings of bullish rumors coursing through the options came this morning, with a 12.8% spike in implied volatility to 47%, making Salesforce.com one of the day’s top implied volatility gainers as its shares set a new 52-week high at $72.47. The take higher in volatility was accompanied by heavy buying interest in the conspicuously out-of-the-money June 80 calls, which traded for about $1.00 apiece on volume of 4,940 lots, where open interest numbered no more than 574 lots previously. Until today, the 122,500-strong open interest in Salesforce.com showed a fairly even split between puts and calls, making today’s 7-to-1 privilege of calls an eye-catching development indeed.

Monster Worldwide (MNST) – A similar dynamic appeared to move lots this morning in another evergreen rumor-stock, recruitment and job-search site Monster Worldwide. An early doubling in option volume against the normal daily average occurred as shares trading 2.5% higher at $24.98, and we saw a rash of buying in June 25 and 30 calls. Monster shares dipped decisively below $30 around the first of the year and have loitered consistently around the mid-20’s ever since, two spikes higher in February notwithstanding (both, incidentally, on takeover rumors).

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