Tuesday, June 7, 2011

Options Flow Recap June 7th

Macro / Thematic

XHB SPDR S&P Homebuilders  – 33,000 of the January 16 calls were sold at $2.36.

XLF Financial Select Sector SPDR (ETF) – 100,000 of the July 16 calls were bought for $0.0825.

SPY SPDR S&P 500 ETF – 40,000 of the July 112 / 120 / 128 put fly was bought for $1.22. The trade was tied to 958K shares at $129.05. Also 30,000 of the SPY Jul 113 / 121 / 129 put butterfly were bought for $1.44.

VIX saw 74% the normal volume with 147K calls and 102K puts traded.  Some larger trades in the pit:
·         Buyer 15K June 16/18 put spread for 1.025 vs 17.80 for 1.025, delta neutral
·         Buyer 3.5K Sep/Nov 22.5 call spreads for 1.00

Greatest increase in 30 day ATMIV vs prior session: CMED, LTD, CYS, NDN, LZ, ASIA, ELN, PCYC, CFSG, ICO
Greatest decrease in 30 day ATMIV vs prior session: TIN, TLVT, FTR, EBIX, NAV, EXEL, BRCD, GSIC, CZZ, SCCO 


PHM PulteGroup, Inc. - ~1800 of the January 7.5 puts were bought for $1.10.

Industrials / Materials

MAS Masco Corporation – 5200 of the July 13 puts were bought for $0.75. The puts were bought to open.

TIN Temple-Inland, Inc. – 4000 of the June 29 puts were sold at $0.15. The puts were sold to open. Also, shares surged 40% to $29.49 (52-week high touched) after  International Paper, the world’s largest pulp-and-paper maker, offered $30.60 a share to increase its stake of the North American market for containerboard used in shipping boxes.  But Temple-Inland rejected the unsolicited offer and adopted a stockholder rights plan to help it fend off a hostile takeover.  TIN traded 46.6 times its usual option volume with 28K calls versus 23K puts.  Jul 30C and Jun 29P were the most actives, more than 11K each.  73% of the premium of Jun 29P was on the bid side.   The investor, who bought 6,425 Jan $25 calls while selling the same number of Jan $30 calls on May 25th, won a paper gain of $1.54 million today! (The buyer paid 90 cents per contract for the spread, which is now worth about $3.30)  “Any time we see an unusually large directional trade that immediately precedes a deal you have to wonder what drove the customer to pull the trigger,” said Henry Schwartz, president of Trade Alert LLC, a New York-based provider of options-market data and analytics. “It definitely worked out incredibly well.”

NAV Navistar International Corp - the commercial vehicle and truck company, traded 10 times its usual volume after its earnings release this morning.  Navistar posted a profit of $74 million, or 93 cents a share, up from $43 million, or 60 cents a share, a year earlier.  The share price, however, was down more than 6% amid concerns of increasing cost.  7.6K calls and 6.3K puts traded, the put/call ratio up to 0.83 to 0.33.  July 60 puts were the most actives with 4688 contracts changed hands.  July 65C was the next, over 3K traded, most of the premium on the bid side.


AMD Advanced Micro Devices, Inc. – 7500 of the October 7 / 10 bullish risk reversal was sold at $0.26. The trade looks tied to 500k shares at $7.75. It is possibly a closing trade.

S Sprint Nextel Corporation – 50,000 of the July 5 puts were sold at $0.12.

FMCN Focus Media Holding Limited – 3000 of the July 28 / 32 put spread appeared sold at $2.19.

VPRT VistaPrint NV  600 of the July 50 / 55 call spread was bought for $0.95.


GS Goldman Sachs Group, Inc – 4200 of the June 140 calls were bought for $0.70.

ENH Endurance Specialty Holdings Ltd.  – 5000 of the June 40 puts were sold at $0.45. The puts were sold to open.


ELN Elan Corporation, plc – 2500 of the January ’13 15 calls appear to have been sold at $0.95.

No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

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