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.

Option Flow Recap May 4th

Macro / Thematic

REE Rare Element Res Ltd Ordinary Shares - 12,000 of the July 12 puts were sold at $1.20. The puts were sold to open.

SLV iShares Silver Trust (ETF) – 25,000 of the May 36 / 38 put spread were sold at $0.76. This could be the closing of an existing position or a roll of a position down from the 38 to the 36 puts.

XLE Energy Select Sector SPDR – 10,000 of the June 76 straddles were sold at $5.50.

XOP SPDR S&P Oil & Gas Explore & Prod. (ETF)  – 10,000 of the June 63 puts were sold to buy 20,000 of the June 59 puts with the investor collecting $0.025.

Option Flow Recap April 26th

Macro /  Thematic

VIX saw 65% the normal volume with 165K calls and 37K puts traded.  The most active VIX options were: June 25C (19K), May 19C (16K), May 18C (13K), July 25C (10K), June 22.5C (9.5K).  The top open interest positions are: May 30C (187K), May 25C (179K), Jun 32.5C (156K), June 18P (151K), May 18P (135K).  VIX closed down 15 to 15.62.

EEM iShares MSCI Emerging Markets Indx  – 17,500 of the January 42 puts were bought for $1.89.

SLV iShares Silver Trust (ETF) – 10,000 of the May 37 / 35 1x2 put ratio spread traded at $0.03.

TLT iShares Barclays 20+ Yr Treas.Bond (ETF)  - TLT May $94/$97 1x2 ratio spread. A trader sold 10,000 May $97 calls at $0.13 and bought 5,000 May $94 calls at $0.68 for a debit of $0.42 or $210,000.

UNG United States Natural Gas Fund, LP - Trader bot over 8K October 14 calls for .42

Option Flow Recap & Chart Review March 18

Click on the company name to see the chart. If you have any questions or suggestions on how to make the blog better please let us know. 




Macro / Thematic

VIX  S&P 500 VIX Futures – 3550 July 19 puts were bought for $0.90, to open.

EEM iShares MSCI Emerging Markets Indx (ETF) - April 40/44 bull put spread for $0.53 credit 
trades 56600x. 

FXI iShares FTSE/Xinhua China 25 Index (ETF) - 4700 April 44 calls were rolled to the 
May 45 call.  Taking profits and staying bullish.

SLV iShares Silver Trust (ETF) - 3756 April 31/38 risk reversals trade for even money.  Very
 bullish trade as this trader either buys SLV at 31 (which is above its 50 DMA) or starts making
 pure profit above 38. 

read more after the jump... .

Option Flow Recap & Chart Review March 15

Click on the company name for a chart.  If you have any questions or suggestions on how to make the blog better please let us know. 

Macro / Thematic

EWY iShares MSCI South Korea Index Fund(ETF) – 24,000 March 54 puts were bought to open. They are currently 6.4% out of the money and with 3 days left to expiration.  Traders looking for this to test its 200 DMA by Friday.  Obviously Korea's economy is heavily tied to Japan.


EWJ iShares MSCI Japan Index (ETF) – EWJ traded over 900k contracts, 39x its average volume as traders spent over $4 million to add 4.2 million deltas in the name.  Most of this came from over 100,000 April 8 / 11 bullish risk reversal trade for ~$0.04. The April 11 calls were purchased for $0.14 and the April 8 puts sold at $0.10.  Capitulation?

Consumer

TGT Target Corporation - 7500 July 45 / 55 strangles were sold at $2.19.   In the chart I drew white horizontal lines at the strikes they sold and red lines at their break even.  Looks like a good sale if you're willing to take that kind of risk.  5000 July 50 Calls were also bought for $3.15 which could be related.  Interesting trade.


TIF Tiffany & Co. – 2500 January 50 puts were sold at $4.63 and 2500 January 55 / 70 call spread was bought for $5.70. It appears to be opening.  Selling puts below its 200 DMA to help finance a call vertical that gives this trader a fat profit if TIF runs to new highs by next year.  Pro trade.


HD The Home Depot, Inc – 10,0000 March 36 / May 37 call spread was bought for $0.67. Appears to be a roll ahead of Friday’s March expiration.  Roll up and out.


LEN Lennar Corporation – 4000 April 19 calls appeared to be bought to open for $1.15.  Big bounce of its 100 DMA today.


Energy


LDK LDK Solar Co., Ltd. – Over 25,000 calls traded today in the Chinese solar company. The March 13, March 14, April 12, September 15, and January 15 calls were all active. Second day in a row the stock trades heavy volume and out performs.


BP BP plc (ADR) – 7000 April 41 calls appeared to be bought for $3.20 to open.  Either bullish or stock replacement now that the stock hard broke it up trend.  Should be interesting to see this trade near its 200 DMA.


OXY Occidental Petroleum Corporation – 3300 January’12 70 calls were sold at $30.30. The trade was an option was tied to $98.42 stock.  Buy write.  Stock bounced off 100 DMA today.


Materials / Industrials

BHP BHP Billiton Limited (ADR) – Over 30,000 April 75 / 70 put spreads traded on the day.  They look to be bought to open.  Very odd trade to me.... 70 is a long way down...below its 200 DMA. Could just be a cheap hedge.  Maybe news is coming out... it did break down below its 100 DMA badly today with volume.


Tech

AAPL Apple Inc. - 1,000 340/385 and 1,000 345/380 strangles were sold. Both with a bullish delta bias. Looks like this trader smartly took advange of the early moring volatility rise.  Not sure I'd go with a bullish bias... the stock has clearly broke down of its upward channel and its 50 DMA.  Ominous sign for the market in general.

CSCO Cisco Systems, Inc. – 10,000 April 16 puts were sold at $0.13.  CSCO hasn't been able to catch a bid.  This trader is looking for the 2004 to 2006 lows to hold at least until April.  Also if you draw the neckline of the H&S pattern at 22.5 then the pattern has played out.  If you draw the neckline at 21 then this might get to down to $14 which was the financial crisis lows.

Healthcare

TEVA Teva Pharmaceutical Industries Ltd (ADR) – 3150 April 52.5 calls were sold at $0.23 and 3150 June 52.5 / 57.5 calls bought for $0.76.  Shorter term bearish....longer term bullish.

*Special thanks to Flotilla Partners, Option Radar, BMO Capital, MEB Options, LiveVolPro, CBOE, Option Monster, 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.

Option Flow Recap March 14

Click on the company name for a chart.

Macro / Thematic

SPY SPDR S&P 500 ETF  March 123/128 put 21,600 x, bear vertical.  Very bearish spread with 4 days to work!

VIX VIX Futures- 25,000 of the May 25 /30 1x2 call spread was bought for $0.375. The May 22.5 / 30 1x2 call spread was bought for $0.50, 10,000x. The March 22.5 / 24 1x2 call spread was bought for $0.11, 10,000x.  Looks to be a hedge.

GLD SPDR Gold Trust (ETF) April 139 straddle trades 3500x

SLV iShares Silver Trust (ETF) March $35 straddle trades 4050x

Consumer

TIVO TiVo Inc. – An investor bought 5800 March 12 calls for $0.10 and sold 6000 March 9 puts at $0.46. Nice credit for a play to pin to 9 or a push even higher on the back of a historically bullish options expiration. 

ERTS Electronic Arts Inc. - A large bullish trade in Electronic Arts with the investor buying 25,000 January’12 22.5 calls for $1.03 and selling 55,000 March 20 calls at $0.04 to close.  Looks like a roll up and out.  ERTS is flagging here.

CAG ConAgra Foods, Inc. - 5000 of the January 25 calls were bought for $0.80 per contract. It was tied to 165k shares at $23.30.

CVS Caremark Corporation - ~6400 of the April 35 calls were bought for $0.38. The contracts were bought to open. Buy'n the dip trade.

LINTA Liberty Media Corp (Interactive) - 5000 July 16 puts were sold at $1.05 to open.  200 DMA is around 14ish.  

Energy

LDK LDK Solar Co., Ltd.  - 300 of the September 10 / 15 / 20 call fly was purchased for $1.20.  Are the nuclear issues in Japan bullish for solars? I like this trade ~ 1:4 risk/reward.  The 200 DMA is near the lowest strike.  The fly is intrinsically worth $1.5ish here already. Nice cheap bullish trade.  If the stock gets to 15 unwind it or roll it. Don't get greedy...complacency kills!

NOV National-Oilwell Varco, Inc.  - 2400 May 95 calls were bought for $0.70.  If its not a hedge they are looking for all time highs.

ATPG ATP Oil & Gas Corporation - 1750 April 14 puts were bought for $0.36 to open, ahead of earnings.  Targeting the 200DMA as shares have recently broken their uptrend and 50DMA. 

Industrials / Materials

GE General Electric Company - 1000 December 21 calls were purchased for $1.31 to open.  Trader buying the dip.  I heard Doug Kass was buying GE today.

USU USEC Inc. - 4400 October 6 calls were sold at $0.25. Appears to be an opening call write. The contract is almost 30 percent out-of-the-money.  

Tech

CERN Cerner Corporation - One strategist paid $2.60 for the April - June 100 put spread, 10,000x.  The stock is in a strong up trend.  

AMAT Applied Materials, Inc. - 4000 April 15 puts were bought for $0.67, to open.  $13.34 gap fill. 

Financials

BAC Bank of America Corporation - 10,000 January'13 12.5 calls were purchased for $3.80.  Stock in a triangle here. 

Healthcare

GENZ Genzyme Corporation - 12,500 July 75 calls were sold at $1.50.

*Special thanks to Flotilla Partners, Option Radar, BMO Capital, MEB Options, LiveVolPro, CBOE, Option Monster, 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: Coinstar Straddle Sale

An interesting trade today in Coinstar, ticker CSTR. A trader sold April $42 straddles @ $5.15 2700x with the stock at $42.67. The trader sold an IV of approximately 51.5% and is counting on CSTR not moving more than $5.15 between now and expiration. A curious conclusion (IMO) given that the stock has recently experienced some serious volatility!

Option Flow Recap March 9th

Macro / Thematic

XLF Financial Select Sector SPDR – 120,000 June 18 calls were bought to open for $0.31.  Looks like a cheap bet that the XLF bounce off its 50 DMA hands and runs over 9% by expiration to profit. 

EEM iShares MSCI Emerging Markets Indx – 50,000 May 49 calls were bought for $1.02. The trade appears to be opening. The contract is 4.7 percent out-of-the-money and has 72 days until expiration. Also notable in today’s trading was a total of 40,000 April 50 / 52 call spreads bought for ~$0.21.

Consumer

CEDC Central European Distribution Corp – 3000 March 12.5 calls were bought for $1.05.  Bounce play.  Has a gap to fill @ $13.53.

TSN Tyson Foods, Inc. – 1400 April 17 puts were sold at $0.10.  Stock looks to be breaking out or making a move to previous highs.  Trader collects the premium at a strong support strike even if TSN pulls back and fills the gap @ 17.6.  200 DMA is at 16.9 and curling up.   

CRI Carter's, Inc.  – 2000 March 30 puts were sold at $0.95.  Looks like a pin play to 30.  Stock gaped down .75 today but was bought aggressively and closed the day up .48 or 1.65%.

BC Brunswick Corporation – 1000 June 21 puts were sold at $1.00 to open.  Strong up trend.  Trader looking to collect premium with the synthetic buywrite and willing to buy the stock around its rising 50 DMA.

Tech

TSM Taiwan Semiconductor Mfg. Co. Ltd. – April 12.5 calls were active today following noise that the company might be in a potential partnership with Apple. Over 3700 of the calls traded with 60 percent bought on the offer. Stock also recently found support on its 100 DMA after completing a 5 wave down move. Could be starting wave 3 or 5.

CTL CenturyLink, Inc. – 1400 of the April 41 calls were sold at $0.65 to open.  Possible buy-write.  Stock finally pulled back after a nice run from the mid 30's to the mid 40's and recently found support on its 200 DMA. 

Financials

TCB TCF Financial Corporation – 1500 of the March 15 puts were bought for $0.20. The trade appeared to be an opening position.  Stock acting poorly.  Cheap bet weakness continues over the next 7 trading days. 

BCS Barclays PLC – 3000 January’13 17.5 puts were sold at $2.65 to open.  Trader doesn't lose money until $14.85 on expiration.  Huge support at $16. Barclays is still way off its former highs and looks to be basing. 

Industrials / Materials

LPX Louisiana-Pacific Corporation  – On the back of renewed takeover speculation in the name 1800 of the March 11 calls were bought for today for $0.05. A total of 2239 calls traded today with no puts trading.  The stock could have formed a big rounded bottom. 

UTX United Technologies Corporation - Ahead of the United Technologies Analysts and Portfolio Managers Meeting tomorrow both the March 85 and April 85 calls were active. 6700 and 2200, respectively, traded on the two lines (with 64% and 58%, respectively, being bought on the offer).  The stock is also in a strong uptrend and continues to move from the lower left to the upper right of the chart.

CX Cemex SAB de CV – 5000 of the April 8 puts were bought for $0.23.  The stock has been in a downtrend since the end of last year.  This trader is looking for a test of 52 week lows or lower. 

Energy

LNG Cheniere Energy, Inc. – 10,000 of the April 10 calls were sold at $0.65 while another investor sold 5000 of the March 8 calls at $0.90. Interestingly the March 9 calls traded 6100x with 85 percent of the trades being executed on the offer.  Huge volume in here recently.  Looks like the 100 DMA held on the first test down but a nasty bar today. Capitulation? 

KWK Quicksilver Resources Inc – Throughout the day an investor appeared to be building a position in the April 14 /15 bullish risk reversal with a total of 11,700 trading on the day. One block traded at $0.20 1400x. Trader looking for a breakout of a long base. 

Healthcare

WCRX Warner Chilcott Plc – 5000 of the March 24 calls were sold at $0.20 to open.  Looks like a pin play. 

SQNM Sequenom, Inc. – 2500 January’12 7.5 calls were bought for $1.00.  Stock coming into strong support.  Trader looking for a bounce... maybe even a gap fill!  52 week high is 8.65 and the trade breaks even at 8.50 so basically looking for new highs by expiration. 

AVNR AVANIR Pharmaceuticals – 5000 January’12 5.0 calls were bought for $0.28.  Trader looking for this bounce off the trend line and 200 DMA to run and test the highs. 


*Special thanks to Flotilla Partners, Option Radar, BMO Capital, MEB Options, LiveVolPro, CBOE, Option Monster, 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.

Netflix under pressure...Are people seriously going to watch movies on Facebook?

NFLX came under pressure today, as it was announced yet another competitor is entering its streaming entertainment space. MarketWatch has the details

For NFLX to be down on such a buoyant day for the overall equity market is certainly no good omen. NFLX, however, has completely and totally destroyed short sellers throughout it's meteoric rise that arguably began in February of 2010 when the stock was around $60, so I would hesitate to suggest getting short. Longs, however, should check their risk at the door if they have not  already.

A look inside the option market shows that today investors traded more puts (97,043) than calls (74,713) and traders took in a net credit of about $1.1mm in premium on those calls while spending about $2.5mm of premium on puts. Certainly not bullish looking action, but I would not draw too many conclusions based on these details. Consider that there are likely many traders that have been long and could be employing a variety of strategies to hedge their gains at this time.

Courtesy: LivevolPro

Song of the Day: Hustlin' Remix Rick Ross x The Black Keys

Everyday I'm hustlin'

Option Flow Recap March 7

Macro / Thematic

USO United States Oil Fund LP – An investor bought the April 41 / 38 1x2 put spread; 12500 x 25000 for $0.43.

JNK SPDR Barclays Capital High Yield – An investor bought 4000 April 39 Puts for $0.15

Consumer

AMR AMR Corporation – 14,500 April 7 calls were bought for $0.27

SPLS Staples, Inc. – 7500 September 22 / 19 bullish risk reversals traded. The investor collected $0.25.

LBTYA Liberty Global Inc. – 15,000 January’12 50 / 55 call spreads were bought for $1.10

TGT Target Corporation – 5000 TGT April 50 puts were sold at $0.80 and seperately 4000 July 55 calls were bought for $1.44

Tech

AMAT Applied Materials, Inc.  – 10,000 April 15 puts were bought for $0.34 while 8845 April 15 puts appeared to be sold at $0.40 and an additional 8600 appeared sold at $0.34 to open. A total of 36,500 options traded on the line today.

ARMH ARM Holdings plc – 9000 October 24 / 27 3x2 put spreads traded today for a small credit of $0.12 to $0.15. The October 27s appear to have been sold and the October 24s bought.

MU Micron Technology, Inc. - An investor paid $0.42 for 10,000 of the January 10 /15 bearish risk reversal, tied to 640k shares at $11.47. The trade could be closing of an existing position or part of a collar.

Financials

MET MetLife, Inc. – 5000 of the June 46 / 40 bullish risk reversals traded with the investor collecting $0.32. This is an opening position.

C Citigroup Inc. - Jan 13 7.5 calls sold 16,000x @ $0.19

Industrials / Materials

VSH Vishay Intertechnology – Over 5000 July 17.5 puts traded today with almost 3900 trading on the offer.

ACI Arch Coal, Inc. – One investor sold 8600 January 10 puts at $0.11 and bought 13,000 January’13 12.5 puts for $0.78

Energy

HK Petrohawk Energy Corporatio - 10000 January’12 5.0 Puts were sold at $0.06 

Healthcare

HMA Health Management Associates, Inc.  – 1300 August 11 / 13 call spreads were bought for $0.55

HGSI Human Genome Sciences – 7500 March 22 / 24 put spreads were sold at $0.35.

*Special thanks to Flotilla Partners, Option Radar, BMO Capital, MEB Options, LiveVolPro, CBOE, Option Monster, 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.

Option Flow Recap Feb 25

Macro / Thematic

XLF - An investor sells 50,000 March 15 puts at a nickel and buys 25,000 June 15 puts at 36 cents. This 1x2 time spread, for a net debit of $0.26, might be rolling out of a hedge from March to a position half the size in June.

GLD - April 138/143 call 1x2 front spread for $.043 debit

Consumer

SLE – An investor sold 62,000 July 18 Calls at $0.49.

PHM – 3500 January 7.5 calls were bought for $1.13. Appears to be a bullish play and a bet that the stock will find a floor, then rally in the months ahead.

F – The June 17 / 20 1x2 calls spread was bought 5,500 by 11,000 times for $0.26.

MED – The April 23 / 26 call spread was bought 1000 times for $1.20. The company is due to release its results early-March.

ARO – 3000 April 25 puts were sold at $1.00

EXPE – 1400 April 20 calls were bought for $1.10.

Energy

HK – An investor sold 37,600 June 19 calls at  $3.71 to close and bought 47,000 June 21 calls for $2.53 to open. It appears to be a rolling up in strikes.

EP – An 1100 contract block of April 18 calls were bought for $1.01 to open.

RRC – Bullish activity today in Range Resources, including, 7200 June 70 calls being bought for $0.45 to open. Over 11k contracts traded in the June 70 strike.  IV was up 2.4%.  1k June/March 52.5 calenders were also bought. 

Industrials / Materials

TIN – 4000 March 25 calls were sold at $0.60

RTN – Bearish activity: 2100 of the March 50 puts were bought to open for $0.67

Tech

ATVI – The May 12 Calls were bought 20,000 times for $0.28 vs 11.10 stock

GLW – 9500 April 24 / May 25 call spread was bought for $0.05 to open. It appears to be a roll of a bullish position from May to April, down one strike.

YHOO – Bullish long term play in Yahoo where 3900 January’13 15 calls were bought for $4.30 to open

Financials

CIM – 23,500 June 4.5 calls were sold at $0.05.

Healthcare

JNJ – 4500 January’13 75 calls were sold at $0.72

AVNR – 4100 June 3.5 calls were sold at $0.45.

*Special thanks to Flotilla Partners, Option Radar, BMO Capital, MEB Options, LiveVolPro, CBOE, Option Monster, 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.