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.

Option Flow Recap for Febuary 10, 2011

Macro / Thematic

SPY – The March 122/125/128 put fly was bought for $0.23; 25,000 x 50,000 x 25,000. The trade makes money with SPY trading on March expiration between 122.23 and 127.70, paid 0.23 with the biggest profit potential of 2.77 with SPY closing on March expiration at 125.00. Limited risk trade. Risk is the debit paid for the fly (0.23).

QQQQ – 5000 of the March 57 / 54 put spreads were bought for $0.55

EWZ - Vol buyers in EWZ (Brazil) betting on volatility to expand.

Consumer

MDS – Bullish trade in Midas today with 6000 of the June 7.5 calls bought for $1.10 to open

GME – A lot of bullish option flow in Gamestop today with 28,000 calls and only 3700 puts trading. March 20 and February 21 calls are the most active with over 4700 and 4600 trading respectively almost all bought to open. Earnings are due mid March.

LOW - Size call buyers in January (could be closing) 10k January 35 Calls for 0.18.

BBY March $30 puts 5k vs OI 1,590

DKS traded 13409 February $38 calls against OI of 368, crushing IV by opening sellers seeing limited near term upside for shares

PAY buyer of 2,000 May $43 calls @ $3.10, stock near a breakout of a cup and handle pattern

COH volatility sale of 2,000 March $57.50 straddles sold @ $3.65

F  13,000X, March/May $17 calendar call spread

NILE IV30 up 6.5% in front of earnings, options volume 10X average with 3,434 calls and 4,281 puts.  February $60 puts trade 2,500 and some 65/60 put spreads bought.

CL options active again, a few days after a report that Unilever (UL) should look to buy the Company. The May $70 puts have been sold for more than 6,000 contracts while a block of 6,000 May $85 calls was bought, shares at $77.50. With a market cap of $37.8B this would be a huge deal.   

GES  3 way trade in March, trader sells 2,000 March $40 puts at $0.50 and buys the March $45/$50 ratio call spread 1,000X2,000 at $0.97.

MICC block of 4,000 April $105 calls bought at $0.70 and 900 April $90 puts sold at $3.30.

Energy

HK – 20,000 of the June 30 calls were bought for $0.15. The bullish activity in the name comes the day after Encana (ECA) , Petrochina deal was announced.

RRC – 2500 of the September 70 calls for $0.75.

TLM – 5000 of the April 21 puts were bought for $0.65.

MUR 800 March $80 calls bought @ $0.20

Tech

RVBD - Bearish activity in RVBD: put spread buyers. 1400 March 35 / 40 put spreads were bought for 1.45.

EMC – Large call spread traded today. 30,000 of the April 24 / July 29 call spreads were bought for $2.03. The position appears to be a roll up strikes and out several months.

RIMM – Option activity picked up significantly in the afternoon after the company announced plans for the playbook software to run Google Android apps. 125,000 calls and 55,000 puts traded on the day. The weekly contracts were very active with 17,000 of the February (2/11 expiration) trading.

SYMC with 2,000 March $20 calls bought here and IV pushing higher, frequent chatter name

CHKP block of 10,200 January 2012 $47.50 calls bought at $6.20 offer to open, huge trade size, with the January 2012 $40 calls being closed and rolled to this strike, some profit taking but remaining very bullish

MSFT bouncing off re-test of major breakout level, and around 7,500 Feb. 28 calls bought 11 cent offer

JDSU huge call volume with 60,000 trading, 10X average and big buyers in June $30 calls, as well as 3,120 June $22.50 calls rolled out to the $27 strike

JNPR April 43/36 bull risk reversal traded 2,250X at $1.97

Materials / Industrials

AA – The February 16 puts were very active today with over 32,000 trading (89% on the offer) and given the open interest in the name, most are to open. The option players are paying $0.04, $0.05, and $0.06 for an option that is 6.4% out of the money and expires in 9 days (including the weekend).

ITT block of 400,000 shares short @ $59.10 along with 5,000 July $60/$50 collars, bear collar position on short stock

Financials

BEN  trading 10X daily call volume, selling 2,830 Jan. 2012 $100 calls and rolling to 4,325 January 2012 $125 calls

KIM – 4800 of the April 20 calls were sold at $0.25 to open. 

NDAQ roll of 2,145 Feb. 24 calls to March $25 calls. Exchange stocks have been hot as of late

BRCM sale of 8,000 March $43 straddles at $3.27, tied to 120,000 shares of stock bought at $43.65

Healthcare

SQNM – 3000 of the March 8 calls were sold at $0.22. It appeared to be a call writer taking advantage of the strength in shares today.

MHS – 5000 of the January 55 / 72.5 bearish risk reversal traded for $1.10. The trade was tied to 296,000 shares at $61.88. The company reports earnings on February 22^nd.

PRGO trading 15X daily call volume as 1,500 Feb. 65 calls are rolled to May $65's

*Special thanks to Flotilla Partners, Option Radar, BMO Capital, LiveVolPro, CBOE, Option Monster, and all of the options desks and traders we work with to provide the option flow!

Trade of the Day: F March/May $17 calendar call spread 13,000x

The Trade

A trader sold 13,000 March $17 calls at $0.24 and bought 13,000 May $17 calls at $0.74 for a debit of $0.50 or $650,000. It's interesting to note that a trader initiated a March/May long calendar spread yesterday too.

Risk/Reward

The max risk and max profit potential for this calendar spread are both limited. The max risk for the long call calendar would be the costs to put on the spread, the debit. The maximum profit potential of this spread would occur if the underlying stock price would move directly to the strike price. Therefore, a large move in the underlying would hurt the spread, an increase in volatility would help, the passage of time would help.

At March expiration, the lower and upper break even underlying price levels are $16.80 and $17.20. At the close today, the underlying finished at $15.95. The 52-week range for F is a low of $9.75 and a high of $18.97. On February 4th, Ford reported a fourth-quarter earnings miss. If F were to reach the $16.50 level and approach the $17 max profit level before March expiration, the trader would have the option to unwind the position and take profits. Or, the trader can roll the short March calls to short April calls and keep the same spread on. Depending on the traders view, he can also roll into a butterfly or a back-spread at very favorable prices.

Ford traded 223,476 contracts today.

According to Google Finance, F had the lowest P/E ratio compared to its competitors TM, HMC, NSANY, DDAIF, and VLKAY.

Option Flow Recap for Febuary 9 2011

Macro / Thematic

IWM – 30,000 of the April 72 puts were bought for $0.95 to open.

GDX – 10,000 of the February11 (weekly) / February (regular expiration) 57 call spread was bought for $0.43. The weekly option appeared sold at $0.25 to open and the regular February option appeared bought for $0.68 to open. The investor is betting the shares of GDX remain below 57 for the rest of the week before moving higher into next week’s expiration.

FXI - 7,500 Feb 41/42 put sreads bot to open

EEM - 20,000 May 36 puts sold @ .40 10,000 April 43 puts bought @ 1.1 (possible roll up and out)

Consumer

JCP – Over 5000 of the March 35 / 31 1x2 put spreads were bought to open as the stock hits a new 52-week high. The trade appears to be a short term hedge as the stock has made a 15.6% move over the past four days.

M – Options were active in Macy’s today with almost 20,000 calls and 7700 puts trading. Most of the early action was bullish with call buyers active in the February 25 and 26 calls.

SCSS – An investor sold 6000 June 7.50 puts at 0.275

F – 15,000 March / May 17 call spreads traded for $0.48. The trade appears to be a roll out two months.

SLE – 17,000 March 17 puts appeared bought today (99% traded on the offer). The company’s stock has been under pressure since the company announced that it was planning to split into separate companies rather than put itself up for sale.

BBBY - 1500 March 50 calls bought at $1.18

Energy

EPD – Bearish trade in Enterprise Products Partners where May 40 - 44 bullish risk reversal, bought at 40 cents, 3800x after news of a fire at a Houston plant.

SOLR – February 10 calls were active today with 6500 trading on the day. While early action appeared to be call buyers, the overall action appeared to be both ways.

PPL – 800 July 24 puts were sold to open at $1.05

HNP – 700 March 22.5 calls were sold $0.30.

TMT

ATML – Bullish post earnings trade: 25,000 lot block of May 17 calls bought for 1.40 versus a sale of 15,000 Feb 13 calls for 3.40.

NOK – 6000 July 10 / 8 put spreads were bought for $0.275

ALU – February 3.5 calls are active today with 7800 trading. The company reports tomorrow 2/10.

NTAP – 8000 of the February 65 calls appeared sold at $0.35. earnings on 2/16

YHOO – 10,000 April 17 / Jan 17.5 call spread was bought for $1.10,

Industrials / Materials

USG - An investor apparently sold 2,250 February 17.5 calls at $1.425 to appear to buy to open a May 19 / 22.5 calls spread for $1.30

PCX – 4000 March 25 calls were bought for $1.40

YRCW – 37,000 April 2.5 puts were bought for $0.27. The puts were bought to open

Financials

CBOE – Speculative call buying was active in CBOE following news the NYSE Euronext (NYX) and Deutsche Boerse are in advance merger talks. Almost 15,000 calls and 5000 puts traded on the day. 

KFN - Buyer of 3k March 10 calls @ $0.60 and 5k March 11 calls @ $0.20

Healthcare

THC – Over 5000 of the March 7 calls appeared bought in a multi exchange sweep.

*Special thanks to Option Radar, BMO Capital, LiveVolPro, CBOE, Option Monster, and all of the options desks and traders we work with for pointing out the option flow!