Trade of the Day: Pfizer March $21/$23 call spreads

The Trade:
A trader sold 10,000 March $19 puts to buy 10,000 March $21/$23 call spreads.

Trade of the Day: Yahoo April bull call spreads

The Trade:
A trader bought 30,000 April $16/$20 call spreads and sold 30,000 April $14 puts.

Trade of the Day: RIMM November $26/$20 risk reversals

The Trade: 
A trader bought 6,000 November $26/$20 bull risk reversals, for an $0.80 debit, or $480,000.

Trade of the Day: ORCL March $30/$33 bull call spread

The Trade:
A trader bought the ORCL March 2012 $30/$33 bull call spread 850x at $0.83, or $70,550.

Trade of the Day: LyondellBasell (LYB) December $35/$43 bull call spread

The Trade

Buyer executed the December $35/$43 bull call spread 5,000x for a debit of $3.05. Maximum risk is equal to the debit. Break even is $38.05, with profit potential limited to $43. Chart below highlights break even and maximum loss for the trade.

Trade coincides with an overweight rating set for the chemicals company this morning by Barclays. Looking for a recovery from the recent broad market sell off, with significant support at $28. Graph below shows risk profile for trade.

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Special thanks to Option Radar, BMO Capital, MEB Options, Bloomberg, Reuters, Optionistics, LiveVolPro, CBOE, AMEX, 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.

Trade of the Day: AT&T December $27/$24 ratio put spread

The Trade: 
A trader put on the December $27/$24 ratio put spread for 10,000x20,000 at a $0.16 debit, or $160,000.

Trade of the Day: General Electric (GE) Bull Risk Reversals

The Trade: 
A trader executed 20,000 November $18/$13 bull risk reversal trades at an $0.11 credit, or $220,000. On Friday, a trader sold 15,000 November $11 puts at $0.23 and bought 10,000 November $18 calls at $0.19, for a $155,000 credit. Another trader sold 22,500 January $11 puts at $0.39 to buy 15,000 January $19 calls at $0.23 for a credit of $532,500.The graph shown below is the November risk reversal.

Trade of the Day: Network Appliance (NTAP) September $39/$33 Bull Risk Reversal

The Trade

Trade executed was the September $39/$33 bull risk reversal 20,000x for a $.08 debit. Profit potential is unlimited. Break even is $39.08.

Shares are down, but have bounced from support near $34 since earnings. Recent large bullish activity seems to suggest the name has bottomed. Just last week you might remember, NTAP was a prior trade of the day.

$13.6B market value, trades 13x earnings, 1.3x PEG, 2.9x cash value and 12x cash flow.

Alternative trade would be the September $33/$31 put bull vertical and the September $39/$41 call bull vertical for a total debit of $.31. Trade offers sufficient profit potential with less risk.

http://seaofopportunity.blogspot.com/*

Special thanks to Option Radar, BMO Capital, MEB Options, Bloomberg, Reuters, Optionistics, LiveVolPro, CBOE, AMEX, 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.

Trade of the Day: Gold Miners (GDX) Bullish Spread

The Trade

Trader executed the December $60/$66 call spread 29,449x for a $2.20 debit, $6,478,780 total, and sold the December $50 put 44,176x for a $1.90 credit, $8,393,440 total. Total credit for spread is $1,914,660.

Maximum loss is $218,965,340. Profit potential is limited to $19,584,060 at $66. Break even for the trade is $49.57. Graph below shows risk profile of the spread.

Trade is a bet on the continuation of gold's uptrend, GDX looking for a bounce to $66 from current levels near $59. Chart below highlights profit potential for the spread.

http://seaofopportunity.blogspot.com/*

Special thanks to Option Radar, BMO Capital, MEB Options, Bloomberg, Reuters, Optionistics, LiveVolPro, CBOE, AMEX, 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.

Trade of the Day: NTAP March $45/$30 bull risk reversal

The Trade:
A trader executed 5,000 March $45/$30 bull risk reversals at an $0.08 credit, or $40,000.

Trade of the Day: Gold (GLD) January $150/June $225 Bull Risk Reversal

The Trade

Trader sold January $150 puts at $2.35 and bought June $225 calls at $6.95 15,000x for a $4.60 debit, $6,900,000 total. Maximum risk is $231,900,000. Profit potential is unlimited.

Chart above graphs profit and loss profile for the trade. Trade is highly bullish and benefits from rise in volatility. Blue line below highlights break even at $187.49.

Alternative trade would the January $145/$150 bull put spread, buying $145 and selling $150, with the June $225/$240/$255 call butterfly. $1.05 debit for butterfly and $.60 credit for put spread, $.45 total debit. Position limits downside risk, while retaining bullish bias with a superior risk-to-reward ratio.

http://seaofopportunity.blogspot.com/*

Special thanks to Option Radar, BMO Capital, MEB Options, Bloomberg, Reuters, Optionistics, LiveVolPro, CBOE, AMEX, 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.

Trade of the Day: JPM 5k Dec Put Fly 18/23/28

JPMorgan Chase & Co. JPM – 5000 of the December 18 / 23 / 28 put flys were bought for $0.39. The maximum profit comes at 23.00 or 31.16% below the current price.

The chart above shows the break even points in white and max profit in green.


http://seaofopportunity.blogspot.com/ 


 *Special thanks to Option Radar, BMO Capital, MEB Options, Bloomberg, Reuters, Optionistics, LiveVolPro, CBOE, AMEX, 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.

Trade of the Day: Exxon Mobil January call spread risk reversal

The Trade:
A trader sold the January $65 puts to buy the $70/$80 call spread for a $0.70 debit, or $490,000.

Trade of the Day: Citi (C) January $35/$42/$49 call butterfly spread

The Trade

Trader executed January $35/$42/$49 call butterfly spread 25,500x for a maximum risk equal to a $.95 debit, $2,422,500 total. Profit potential is limited to $42, a gain of over 50% at current levels, $15,427,500 total.

Trade is bullish, looking for a bounce to prior levels. First break-even is $35.95. Shares finished the month of July at $38.34, but suffered substantial losses, down 21.9% month-to-date. Chart above highlights first break-even with the lower line and maximum profit potential with the higher line.

The January $42 call traded over 54,000 contracts and is the most active.

http://seaofopportunity.blogspot.com/*

Special thanks to Option Radar, BMO Capital, MEB Options, Bloomberg, Reuters, Optionistics, LiveVolPro, CBOE, AMEX, 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.

Trade of the Day: Emerging Markets (EEM) September $45/$42 bull risk reversal

The Trade
Trader executed September $45/$42 bull risk reversal 10,000x for a credit of $1.45, $1,450,000. Maximum risk is similar to going long at $40.55. Profit potential is unlimited.



The trade is bullish, looking to capitalize on recent market weakness and for a sustained move above $40.55 to break even. Chart below marks break even point for the trade.







http://seaofopportunity.blogspot.com/

*Special thanks to Option Radar, BMO Capital, MEB Options, Bloomberg, Reuters, Optionistics, LiveVolPro, CBOE, AMEX, 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.

Trade of the Day: VXX September $41/$29 bear risk reversals

The Trade
A trader executed 12,200 September $41/$29 bear risk reversals at a $0.20 debit, or $244,000.

Trade of the Day: Bank of America (BAC) February 2012 $12/$14 ratio call spread

The Trade

Trader executed the February 2012 $12/$14 ratio call spread 20,000x for a $.05 debit, $100,000 total. Maximum risk is unlimited, equal to going short at $16. Maximum profit potential is limited at $14 to $3,900,000.

Analyzed solely based on direction, the trade is clearly bullish. However, the real premise behind the trade is that it favors a decrease in implied volatility. This trade looks to see current implied volatility levels of roughly 56% to decrease somewhere near historical levels in the low 30% range. The trade is also positive theta, meaning that it profits from premium time decay.

The graph below shows the profit potential of the trade assuming implied volatility decreases to 31%.

http://seaofopportunity.blogspot.com/

*Special thanks to Option Radar, BMO Capital, MEB Options, Bloomberg, Reuters, Optionistics, LiveVolPro, CBOE, AMEX, 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.

Trade of the Day: Qualcomm September $55/$60/$65 call butterfly spread

The Trade

Trader executed the September $55/$60/$65 call butterfly spread 5,000x for a debit of $.39, $195,000 total. Maximum risk is equal to the total debit. Profit potential is limited to $2,305,000.

Currently, the position is positive gamma as it is looking for a big move to help shares settle slightly above $55 and below $65. Moreover, passage of time, or theta, will lower the value of the spread.

The daily chart above depicts the profit zone for the spread. A retest of yearly highs near $60 is the optimal scenario.

http://seaofopportunity.blogspot.com/

*Special thanks to Option Radar, BMO Capital, MEB Options, Bloomberg, Reuters, Optionistics, LiveVolPro, CBOE, AMEX, 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.

Trade of the Day: Teva Pharma December $40/$47.50 call spread

The Trade

Trader bought the December $40 call and sold the December $47.50 call 5,000x for a debit of $1.92. Maximum risk is $960,000, the total debit. Profit potential is limited to $2,790,000 with a move to $47.50 or more.

Trade of the Day: Suncor Energy (SU) Bull Risk Reversal

The Trade:
A trader bought 3,250x December $35/$25 bull risk reversals at $0.56, or $182,000.