VIX Vega beat down

Important to ask yourself why they are doing this?

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.

Options Flow Recap Oct 10

Macro / Thematic

iShares MSCI EAFE Index Fund EFA - 2200 of the November 52 calls were sold at $1.66.
iShares MSCI Japan Index EWJ - 30,000 of the December / March 10 call spreads were bought for $0.20. Likely a roll of a bullish position out to March.
SPDR Gold Trust GLD - 6000 of the November 163 / 171 1x2 call ratio spread was sold at $0.10. The investor bought one 162 call and sold two 171 calls.
Direxion Small Cap Bear 3X Shares TZA - 10,000 of the November 45 / 50 call spread was bought for $3.00. The calls spread appears to be bought to open. (I could see the argument that TZA is at support but risk 3 to make 2? There are better ways to play this)
PowerShares DB US Dollar Index Bullish UUP - 46,300 of the December 22 calls were sold at $0.38.  ($ bounce might be over... traders taking profits)

Morning Note Oct 7th

October 7, 2011


US equity futures are trading lower ahead of September unemployment data due at 8:30 ET

Lipper reports equity fund outflows of ($5.9B) in w/e 5-Oct vs outflows of ($5.9B) in w/e 28-September. Ex-ETFs, outflows were ($638M) in w/e 5-Oct vs outflows of ($1.7B) in w/e 28-Sep.

Option Flow Recap Oct 3rd

Macro / Thematic

IWM – 43,000 x 49,000 of the October 63 / 69 ratio put spread was sold at $3.87 (as if 1 to 1). The trade appears to be a roll down from the October 69 puts to the October 63s.

IYR – 20,000 of the December 60 puts were bought for $10.10. The puts appear to be bought to open.

SPY – 13,000 of the November 100 / October 115 put spread was sold at $3.55. The trade appears to be roll from the October 115 puts down to the November 100 puts.

UNG – 28,000 of the January 10 calls were bought for $0.35 tied to $8.95 stock.

XOP – 10,000 of the December 49 / 43 put spread was sold at $3.65 to buy 20,000 x 30,000 of
the December 40 / 30 ratio put spread for $0.13 (as if 1 to 1) and sold 20,000 of the December 52 calls at $1.12. The ratio put spread collar was an opening transaction.

Options Flow Recap Aug 17th

Macro / Thematic

QQQ PowerShares QQQ Trust, Series 1 - buyer 17,000 Oct 47/52 put spread for 1.19


SPY SPDR S&P 500 ETF   - 46,000 of the October 101 / 107 / 113 put fly was bought for $0.51. The put butterfly was bought to open.

Options Flow Recap Aug 15

Macro / Thematic

FXI iShares FTSE/Xinhua China 25 Index - 28,500 of the September 40 calls were bought to open for $0.50. A total of 40,609 traded on the day. Also a buyer of 23,000 Nov 42 calls for 65 

IWM iShares Russell 2000 Index – 32,000 of the November 57 / 63 / 69 put fly was bought for $0.62. The put fly was bought to open and has a maximum profit $5.38 if the IWM closes at $63.00 on November expiration, a decline of 12.2% from the current price ($71.76).


GLD SPDR Gold Trust : seller 11,500 Jan 135/150 call spread for 13.10


IYR iShares Dow Jones US Real Estate : seller 5,500 Aug 61 puts, seller 5,500 Sep 56 calls, collecting 7.20

Options Flow Recap Aug 11th

Macro / Thematic

GLD SPDR Gold Trust - 20,000 of the September 158 calls were sold to buy the December 195 / 205 call stupid collecting $7.15 on the leg legs. The December  call stupid was bought to open.

SPY SPDR S&P 500 ETF - 100,000 of the September 124 calls were bought for $0.24 early in the day's session. The calls were bought to open.

Options Flow Aug 8

Macro / Thematic

SPY SPDR S&P 500 ETF - 20,000 of the September 121 puts were bought for $9.90 tied to $113.50. Separately, 22,900 of the August 117 puts were sold at $5.06 to buy 30,400 of the August 112 puts for $3.01. 33,000 of the August 119 puts were sold to buy 23,000 of both the August 112 and 113 puts.  Also, buyer of 78,000 Aug 123 calls for .45-.50

Sub 24 on Volatility Sonar Report

Options Flow Recap August 2nd

Macro / Thematic

TLT iShares Barclays 20+ Yr Treas.Bond  – 4500 of the December 100 / 95 put spread was bought for $2.52.

SPY SPDR S&P 500 ETF: buyer 63,700 Nov 118/124 put spreads for 1.55, 

SPY (qrtly): buyer 30,000 Sep 128 puts to sell 25,000 Sep 132 puts, collecting 1.29, 

SPY: seller 20,000 Aug 128 puts at 2.27, 

SPY: seller 15,000 Aug 125/130 put spreads at 2.30, 

SPY: buyer 10,000 Oct 110/120 put spread vs 128.28, 15 delta for 1.43

(tough to read since they could be hedges on an overall portfolio, profit taking, or rolls) 

UUP PowerShares DB US Dollar Index Bullish – 5000 of the January 22 calls were bought for $0.39.

XLF Financial Select Sector SPDR – 45,000 of the December 13 puts were bought for $0.44.

XOP SPDR S&P Oil & Gas Explore & Prod. – 3000 of the August 60 / 65 strangles were sold at $1.95.

GLD SPDR Gold Trust (ETF) - buyer 5,730 Oct 170 calls for 2.28, opening

Options Flow Recap July 20th

Macro / Thematic

GLD  SPDR Gold Trust - 20,000 of the August 162 / 171 call spread bought for $0.64. The trade was tied to 300,000 shares at $154.82 and appears to be to open.

VIX - 50,000 of the September 25 / 32.5 1x2 call ratio spread was bought for $0.075. The call spread traded 50,000 x 100,000.

Petrohawk Pro Trading Review

If you haven't heard by now HK was bot out by BHP for $38.75.  Here are all my option flow recap notes on HK with links back to the original post.  I highlighted "stand out" trades and put comments on other trades. 


Feb 10th: 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.  (Stock was at $20 here and went to $27 in April.  Also important to watch names in sectors with M&A.  Clear winner)

Options Flow Recap July 11th

Macro / Thematic

EFA iShares MSCI EAFE Index Fund – 10,000 of the August 54 puts were bought for $0.70. Separately, 9000 of the August 56 / 57 put stupid was bought for $2.39.

IWM iShares Russell 2000 Index – 35,000 of the July 82 puts were bought for $0.42 and a separate buyer 35,000 July 82 puts for 42, & a buyer 26,000 Dec 72 puts to sell 19,000 Dec 60 puts, paying 1.41,  & a buyer 22,300 July 81 puts for 23.  

XLU  Utilities SPDR– 1500 of the January’12 31 / 35 strangles were sold at $1.39.

 VIX saw 115% the normal volume with 341K calls and 117K puts traded.  Some larger pit trades:

·         Buyer 10,000 Sep 17 puts for .725

·         Buyer 10,000 July 17 puts for .35

·         Buyer 10,000 Sep 30 calls for 1.05

·         Buyer 5,000 Nov 35 calls vs 21.85, 20 delta for .925

·         Seller 3,500 Aug 19 calls at 2.125

·         Buyer 2,600 Aug 18/25 call spreads for 1.75

Options Flow Recap June 30th

Macro

EEM iShares MSCI Emerging Markets Indx (ETF) - Buyer 15,000 July 42/46 put fly for 14

FXE CurrencyShares Euro Trust - seller 5,000 July 140 puts vs 144.38 at .36

IV Changes

Largest IV Increases: LZ, ED, EBIX, TLVT, DNDN, INCY, ZRAN, WCRX, NHP, CORN

Largest IV Decreases: VRGY, VVUS, VIX, EBAY, CP, SPRD, LEG, MRO, HRBN, WCG

Options Flow Recap June 27th

Macro / Thematic

SPY  SPDR S&P 500 ETF – 10,000 of the July 30 calls were bought for $0.43.  Also, a buyer 17,800 July 127 wkly calls for 1.40 & buyer 7,100 June 125 wkly puts for .49

EEM  iShares MSCI Emerging Markets Indx (ETF) – 8500 of the July 44 puts were bought for $0.40.

XLE Energy Select Sector SPDR (ETF) – 41,000 of the July 70 puts were sold at $1.03.

VIX saw 132% the normal volume with 446K calls and 38K puts traded.  10,000 of the July 30 calls were sold at $0.50. Nothing else really stands out to me

Financial Order Flow Review

If you have been paying attention to our Options Flow Recap posts you might have been noticing some of the odd bullish option prints in BAC, C, and XLF recently.  


Friday @ 11am PST CNBC reports "Extra capital charge on banks maybe 2-2.5%, not 3%"


Unless you've been living under a rock you would have realized this if VERY positive news for the banks. Jamie Dimon and many financial lobbyist have been wining about it for months and it looks like they might have finally paid off the right people.  I'm not suggesting to go all in Financials here but I am suggesting to have a plan and a variety of possible positions you could initiate if the opportunity presents itself. 


Lets take a look at the recent activity: 

Options Flow Recap June 9th

Macro / Thematic

iShares Dow Jones US Real Estate  IYR – 25,000 of the July 58 puts were bought for $1.15. The puts were bought to open.

Industrial SPDR XLI - ~23,000 of the September 34 puts appear to be have been bought for $1.08.

Option Flow Recap June 6th

We're getting some nice trading opportunities as options volume picks up a bit.  I hope you're trading them well.  As always let us know how we can improve the blog.  We will be implementing some suggestions we've received recently. 

Macro / Thematic

SPX – 35,000 of the July 1300 / 1290 put spread was sold at $4.25.

XLF Financial Select Sector SPDR – 35,000 of the June 15 puts appear to have been bought for $0.26.

EWI iShares MSCI Italy Index - 2k Dec 21/18 strangles for a 2.4 debit. (you can see more details here) Interesting trade looking for Italy to be the next name to get hit or expand in volatility.  Personally would look to get out of this quickly.... tick tock $480,000 on the line.  I'd be they blow out of one leg when we get more clarity and let the other leg run or adjust accordingly. 

EEM iShares MSCI Emerging Markets Indx – 30,000 of the June 45 / 49 put spread was sold at $1.38.  

VIX saw 53% the normal volume with 142K calls and 43K puts traded.  Some larger trades in the pit:

·         Buyer 10K June 22.5 calls for .375 vs 18, delta neutral

·         Seller 3K Aug 18/20 call spread at .85

The most active VIX options were: June 20C (17K), June 25C (15K), June 22.5C (15K), June 16P (12K), June 15P (11K).  The top open interest positions are: July 30C (268K), June 18P (195K), June 17P (158K), July 25C (151K), June 22.5C (150K).  VIX closed up .54 to 18.49.

Just a Reminder

Just a reminder to the readers of our blog that might be newer to trading that days like today can be tough to trade. If you can scalp the range, great but if that's not your thing then don't be too proud to just take it easy until the right set up develops. Sometimes the best trade is not taking a bad one and giving up edge, or getting chopped up, or churning commission. As they were pushing the market to new daily hi's, we were looking for stops to get hit rather than a breakout. Hoping you didn't get sucked in. Remember to stay light and tight!

This isn't advice so much as its analysis. Use your brain.

Options Flow Recap May 10

Macro / Thematic

iShares MSCI Japan Index (ETF) EWJ – 20,000 of the June 10 calls appear to have been bought for $0.70.

SPDR KBW Bank (ETF)  KBE – 20,000 of the June 26 calls were bought for $0.35