Wednesday, July 6, 2011

Options Flow Recap July 6th

Macro / Thematic

XLF  Financial Select Sector SPDR– 24,000 of the September 16 / 17 call spread was bought for $0.23. The max payoff on the trade is at $17.00 per share or better, representing a 10.5% rally in the XLF over the next 72 days.

XLI Industrial SPDR (ETF) – 10,000 of the September 32 puts were sold to buy 5000 of the December 34 puts for $0.585

SPY SPDR S&P 500 ETF: buyer 15,000 Aug 126/132 put spreads for 1.34

VIX saw 57% the normal volume with 160K calls and 65K puts traded.   Some larger trades in the pit:
·         Buyer 7,500 Aug 18 calls for 2.15
·         Buyer 5000 Sep 27.5 calls to sell the Sep 22.5 straddle, collecting 5.025
·         Seller 4,000 Aug 16/18 call spread vs 18.55 at .91
·         Buyer 3,000 Aug 16/18 put spreads for .125

IV Changes
Largest IV Increases: WEN, WMS, NWSA, CVC, URBN, MRO, VHC, RIG, LEG, BJ


EBAY  eBay Inc. – 45,000 of the July 27 puts were sold at $0.03.

TM  Toyota Motor Corporation– 3000 of the August 77.5 / 82.5 put spread was bought for $1.27. The beairsh spread appears to be to open.


NRG NRG Energy, Inc. – 1420 of the July 24 puts were sold at $0.40. The puts were likely sold to close.

HAL Halliburton Company – 1000 of the August 55  calls were bought for $1.37. The calls were bought to open. Stock is breaking out. 55.38 is its all time highs.  This trader is looking for it to take those highs out before aug ex. 

Industrials / Materials

ACN Accenture Plc – 17,250 of the July 60 / 62.5 put spreads were bought for $1.00. It is likely a roll of a position from the July 60s into the July 62.5s. Seperately 2000 of the August 62.5 puts were bought for $2.25.  The stock is making all time highs so most likely just a hedge. It is at the upper end of its price channel so I can see why someone would take some risk off here. 

LPS Lender Processing Services, Inc. – 4800 of the September 25 / 17 put spread was sold at $3.75. It appears to be a roll down in strikes from the September 25s to the September 17s.

VECO  Veeco Instruments Inc.– 1500 of the August 43 puts were bought for $2.35. The puts were bought to open.  


CSCO Cisco Systems, Inc. – 20,000 of the August 17 callls were sold at $0.15. Approximately 2 minutes later 10,000 of the January 22.5 calls appeared sold at $0.07. Both trades appear to be to open.

EMC EMC Corporation – 10,000 of the August 25 / October 26 put spread was bought for $0.69.  The investor might be rolling a position opened on 6/24 when 10,000 were bought at 85 cents. – if so, the position is being closed at a sizeable loss.

INTC Intel Corporation  – 15,000 of the July 22 /23 strangle was sold at $0.23. The trade is based on expectations that shares will hold between $22 and $23 through the expiration at the end of next week. Intel's earnings come into play on Jul 20, which is the Wednesday after the expiration.

BIDU  Baidu – has been on quite the hunt all over the world for acquisitions lately.  In the past couple months, Baidu has announced its buying China’s #1 travel search engine valued at $306 million, a deal with MSFT to offer English language search to users and a separate deal to put internet search boxes on television screens in China.  According to Robin Li, CEO of Baidu, that is not going to end anytime soon.  As he spoke on the 5th anniversary of Baidu’s listing on the Nasdaq, he made the companies intentions clear by saying: “In the past few years, Baidu has made very few acquisitions because our core business has been growing very rapidly…going forward we are increasingly keen on making this kind of strategic move”. 
Looks like option traders are following the money and buying calls on BIDU.  Out of a basket of ADRs we follow, BIDU weeklies were the most active - especially the 7/8 145 and 150 call strikes on the offer.   In the regular July 145 call options, it appears someone was executing a VWAP for $3.50.  Earnings will be out July 18th, which is just a few days before those options expire.  The last Upgrade BIDU saw was on July 6, 2011 when Collins Stewart Initiated coverage to a Buy and the company has an earnings history of positive surprises.  BIDU closed down .03 to 145.84.


BAC  Bank of America Corporation – 40,000 of the August 10 puts were bought for $0.30. Seperately 19,000 were bought for $0.25.  Something is going on here... all the option desks I spoke with said these puts were not tied to stock.  Volatility sells came in later on in the day though so tough read.  I'm watching closely to play trend days full size.  Lots of speculation both ways in BAC for August.  Earnings later this month. Can't wait to see what AA and JPM report. 

BX  The Blackstone Group L.P. – 14,570 of the January’13 20 calls were bought for $1.30.


BSX Boston Scientific Corporation – 6000 of the November 7 puts were sold at $0.53. 

 *Special thanks to Option Radar, BMO Capital, MEB Options, LiveVolPro, CBOE, Option Monster, T.O.P. group, and all of the options desks and traders we work with to provide the option flow! 

 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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