BAC, C, & MS Lead Banking Stocks Lower

How To Use the Most Volatile Stocks List

I had a trader ask me how to use the "Most Volatile Stocks List" last week so I wanted to give an example of how I use it.  This might not work for everyone, risk management is key, experience is key, and I'm not giving investment advise.  This is purely educational.

The post: Volatility = Opportunity is posted everyday and screens for names that trade over 1MM shares of stock, over 5k options, and has an implied volatility (IV) over .6.  We post the top 20 because... well that's what we use.

Option Flow Recap April 20

Macro / Thematic

TLT iShares Barclays 20+ Yr Treas.Bond – 50,000 of the June 101 calls were sold at $0.14 and the September 98 / 101 call spread was bought for $0.46, also 50,000x. The September call spread was bought to open and the June calls appeared to be a closing transaction.

Consumer

LVS Las Vegas Sands Corp. – 10,000 of the May 40 puts were bought for $0.45. The puts were bought to open.

DISH DISH Network Corp – 10,000 of the May 24 calls were sold at $1.15. The calls were sold to open.

SVU SUPERVALU INC. – 3000 of the October 13 calls were bought for $0.55. The calls were bought to open.

Energy

WMB Williams Companies, Inc. – 35,000 of the May 17 / January 22.5 call spread was sold at $5.05. The May calls were sold to close and the January 22.5 calls were bought to open.

ENER Energy Conversion Devices, Inc. – 22,000 of the September 1.5 puts were bought for $0.35. The puts were bought to open.

Industrials / Materials

TYC Tyco International Ltd. – 11,000 of the May 47 / 52.5 risk reversals traded at $0.30. The May 52.5 calls were bought for $0.54 and the May 47 puts were sold aat $0.85 to open versus 48.86 stock

VALE – 12,000 of the January 35 / 45 1x2 call ratio spread was bought for $1.86 12,000 x 24,000. It appears to be an opening position tied to 300,000 shares.

ABX Barrick Gold Corporation  – 5000 of the May 55 puts were bought for $1.67 versus $55.23 stock. The puts were bought to open.

Tech

BMC BMC Software, Inc. – 5000 of the May 52.5 calls were bought for $0.575. The calls were bought to open.

VZ Verizon Communications Inc. – 10,000 of the January 32 / 42 bullish risk reversal traded for $0.33. The trade appears to be opening and tied to 492,000 shares at $37.89.

Financials

PRU Prudential Financial, Inc. – 4500 of the January 65 / 72.5 / 80 call fly was bought for $1.30

WFC Wells Fargo & Company – 9000 of the January 20 / 30 put spreads were sold and 9000 of the January 35 calls were bought, with the investor collecting $2.40 on the package.

Healthcare

ARIA Ariad Pharmaceuticals, Inc – 10,000 of the May 3 / November 5 put spread was bought for $0.25. The trade appears to be a roll from May to November up and out.

CYH Community Health Systems – 7500 of the May 24 / 28 bearish risk reversal was bought for $4.15. The trade appears to be opening and tied to 750,000 shares at $31.60

*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 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.

Trade of the Day: Forest Laboratories, Inc. January '12 bull risk reversal

The Trade

A trader bought 4,245 Jan '12 $40 calls at $0.80 and sold 4,245 Jan '12 $25 puts at $0.70 for a net debit of $0.10 or $42,450.

Risk/Reward

As you can see from the graph above, the spread is bullish. In this spread, the long calls are partially financed by the short puts. The maximum risk is being put the stock if the underlying is below $25 at expiration. The maximum profit potential at expiration is unlimited since we are long the $40 calls. The break even underlying price at expiration is $40.10.

The line shown in the chart above is the underlying break even price at expiration. Thee 52-week range for FRX is a low of $24.17 and a high of $34.59. Therefore, the underlying must make new highs for this spread to be profitable.

Forest Laboratories, Inc. and its subsidiaries develop, manufacture and sell branded forms of ethical drug products. On February 22, 2011, FRX agreed to buy Clinical Data Inc. (CLDA) for at least $1.2 billion, betting that Clinical Data's newly approved antidepressant Viibryd can help offset the loss of major products in coming years. FRX announced that the deal may not be profitable until 2014 as it invests in marketing Viibryd. FRX anounced today that they may receive approval this week for its drug, Daxas.

FRX traded 15,078 contracts today vs. an average volume of 1,167.

According to Google Finance, FRX has a lower P/E ratio and Price-to-sales ratio then drug industry giants Pfizer and johnson & Johnson.

Trade of the Day: JCP March 36/37 short strangle

The Trade

Per a reader's request, the trade of the day is a short strangle in JCP. A trader sold 173 March $37 calls at $1.07 and sold 173 March $37 puts at $1.53 for a credit of $2.60 or $44,980.

Risk/Reward

As you can see from the graph above, the strangle has limited profit potential, and unlimited risk in either direction. The maximum profit potential is the credit of $44,980. The lower and upper break even underlying prices at expiration are $33.40 and $39.60. Knowing the characteristics of short strangles, the passage of time helps, a large move in the underlying hurts, and an increase in volatility hurts.

The 52-week range for JCP is a low of $19.42 and a high of $37.48. J.C. Penney Company, Inc. reports earnings tomorrow before the opening. JCP traded 16,790 contracts today compared to average volume of 12,790. According to Google Finance, JCP has a higher Price-to-sales ratio of 0.49 compared to competitors SHLD and M. SHLD reported earnings before the open today and shares have dropped 5.54%.

Trade of the Day: C Sep Bull Vertical Risk Reversal

The Trade

A trader bought 9,141 September $4.5 calls at $0.57, sold 9,141 September $5 calls at $0.32 at $0.32, and sold 9,141 September $4.5 puts at $0.37 for a credit of $0.12 or $109,692.

Risk/Reward

The trade is a call bull vertical that is executed for a $0.12 credit by selling the $4.5 September put. As you can see from the graph above, the risk reversal is bullish. The maximum risk is being put the stock if the underlying is below $4.5 at expiration. The maximum profit potential is capped at an underlying price of $5 and above at expiration. At this price level and above, both short options expire worthless, and the long calls get exercised. Above $5, the max profit for the spread would be $566,742. The break even underlying price level at expiration is $4.38.

The line shown is the lower break even price.

Citigroup traded 1,378,563 contracts today compared to an average of 828,435.

Trade Idea - FCX short

SPY is making new highs yet FCX, a market leader, is below its 50 day moving average. The 20 day moving average which has been trending up since August is now pointing down and crossed below the 50 day moving average. Classic bearish divergence but the market and FCX are still in up trends.

Therefore, I don't want to risk much capital in case we continue to melt up.  I like the May 50/45 1x2 put ratio spread for even or a small debit (experienced traders could leg into this for a credit).  In the chart above $45 is roughly where the 200 day moving average is and there is support at $44. The risk reward on expiration looks like this:

Also noteworthy that you can do this exact trade in August for a credit.   The downside to this trade is that it will require some margin since the trade is naked short a put but you could fly it up for roughly $0.58.  Also important to remember that you are short vega so a huge move up in the VIX and/or implied volatility in FCX could hurt the trade.  Projected earnings are 4/12.

Disclosure: No position, no plan on initiating a position in the next 72 hours

Option Flow Recap Feb 16

Macro

SPY -  10,000 March 132 / 126 put verticals bought for $1.02.  This strategist is looking for the SPY to fill its gap from Jan 3rd.    

IWM - 10,000 March 79 synthetic shorts trade at the 79 strike and 10,000 long 82 strike straddles trade for $6.62

Consumer

SIRI - A large block of 17,000 January 2 calls were bought for $0.28. 28,000 traded on the day with almost 93% trading on the offer. A total of 70,000 calls and 9000 puts traded on all lines and across all months today.

MGM - 4000 January'12 12.5 calls bought for $4.40 to open.

DIN - 1570 March 55 calls bought for $4.90 to open.

TGT - 1000 March 57.5 calls were sold at $0.34

TSN - 3500 April 21 calls were bought for $0.20

Energy

VLO - A block of 7800 January 35 calls were bought for $1.74. The trade appears to be opening.

SCG - 2500 of the March 40 puts were sold at $0.75 to open.

Tech

MU - Sizable bullish trade in Micron in which an investor bought 15,000 April 13/15 Call Spreads for $0.32.

DELL - 12,500 of the January 12.5 / 17.5 strangle was sold at $1.45. This comes after the company reported a quarterly profit of $0.53 per share, far above analyst estimates of $0.37.

MRVL - 35,000 of the February 18 puts were sold at $0.04.

AMD - 10,000 February 8 calls were sold at $0.79

Industrials / Materials

CSGP - 1000 March 60 puts were bought for $2.00 to open.

FAST - 1000 May 70 calls were sold at $0.75 to open.

GE - 1000 April 23 calls were bought for $0.43.

APH - 1600 March 60 calls were sold at $0.525 to open

Financials

WFC - Wells Fargo options were very active following the abrupt exit of the company's CFO Howard Atkins, which some view as a sign of internal conflicts within the bank about disclosure practices. The largest trade was a block of 3,000 March 32 puts for $0.80. 140,000 calls and 184,000 puts traded on the day

USB - 4500 February 28 calls were bought for $0.73.

Healthcare

SVNT - 13,000 February 10 / March 9 put spreads trade today at $0.28. It appears to be a roll down one strike and out one month.

MHS - Early in the morning an investor bought 1900 February 62.5 calls were bought for $0.75, followed shortly thereafter by another sweep buyer picking up 1100 calls for $1.00.

*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!

Trade: XLF May $15/$19 long strangle

The Trade

A trader bought 98,889 May $15 puts at $0.19 and bought 91,080 May $19 calls at $0.13 for a debit of $0.32 or $3,062,931. The spread is long delta, and therefore, has a slight bullish bias.

Risk/Reward

As you can see from the risk/reward graph above, the long strangle has limited risk and unlimited profit potential. The max risk for the strangle is the debit. The lower and upper break even underlying price levels are $14.69 and $19.34. Knowing the characteristics of a long strangle, a large move in the underlying helps, an increase in volatility helps, and the passage of time hurts. Long strangles are very risky because in order to be profitable, they need a large move in the underlying.

The lines shown in the chart above are the lower and upper break even underlying prices. At May expiration, if the underlying is in the range shown above, the spread will be profitable. The 52-week range for XLF is a low of 13.29 and a high of 17.15.

The XLF seeks to provide investment results that correspond to the price and yield performance of the Financial Select Sector of the S&P 500 Index. The Index includes companies from the financial services, insurance, commercial banks, real estate investment trusts, consumer finance, and real estate management and development.

XLF traded 377,404 contracts today compared to average daily volume of 271,410. The top ten XLF components include JPM, WFC, BAC, GS, MS, BK, USB, AXP, MET, TRV.

*Hat tip to MEB Options for pointing this out to us!

Trade: C September $5.5/$6 front spread 1x2

The Trade

A trader bought 50,000 September $5.5 calls at $0.22 and sold 100,000 September $6 calls at $0.12 for a credit of $0.02 or $100,000.

Risk/Reward

As you can see from the risk/reward graph above, the front spread has unlimited risk to the upside and limited profit potential. The unlimited risk is caused by being naked short the higher strike calls. The max gain would occur at an underlying price of $6. At an underlying price of $6, the short calls would expire worthless, and our long calls would be intrinsically worth $0.50 per contract.

The daily chart above shows C dating back to March 2009. At September expiration, the spread would be profitable for any underlying price below $6.52. The 52-week range for C is a low of $3.15 and a high of $5.15.

It's interesting to note that hedge fund manager, David Tepper, raised his Citigroup Inc. stake by 73% in the fourth quarter. Tepper's Appaloosa Management LP's holdings in Citigroup rose to 138.1 million common shares at December 31 from 79.7 million shares at September 30, according to a Form 3F filed with the U.S. Securities and Exchange Commission. Appaloosa also increased their stake in Bank of America, Wells Fargo, and JPMorgan Chase.

A September $5/$5.5 front spread 18,000x36,000 for a credit of $0.03 also traded today.

Earnings Plays

BMO Capital came out with their weekly Earnings Volatility Screen today.  Here are some highlights: 

Approximately 81% of S&P 500 companies have reported Q4 earnings.

 This week features earnings reports from large cap names including: BHP, CMCSA, BCS, ABB, ABX, ING, APA, ING, DE, DVN, EPD, ESRX, DELL, CVE, EOG, DUK, TLM, NTAP, GENZ, KGC, PCG, WM, INTU, WMB, MMC, A, MAR, CBS, OMC, FSLR, TV, WPZ, HCP, CTL, NVDA, PGN, HST, Q, PWE, AEM, ADI, FE, CLF, NXY, ECL, CPB, GFI, CVC, FTI, CF, ETP, JWN

The options market is predicting an especially volatile quarter (>7% move) for: STEC, DF, ATHN, CTRP, CLWR, SKX, BRCD, FOSL, NVDA, ARUN, MAS, CPLA, SPWRA, TBL, VCI, SIRI, ITMN, WCG, CECO, AAWW, VCLK  


Stocks with the highest level of analyst estimate dispersion (as measured by standard deviation of EPS estimates) include: HST, CPN, BMRN, NAT, PWE, VMED, SIRI, MAS, FBR, CAR, SKX, IO, H, CIT, REGN, CLWR, NVDA, DLR

Stocks reporting earnings that are farthest below their 20 day moving average (in % terms) include: NXY, WLT, SFL, FBR, DPS, GFI, KGC, DF

Stocks reporting earnings that are farthest above their 20 day moving average (in % terms) include: PDE, FOSL, WTW, SIRI, ARUN, MOH, BEC, SPWRA, WCG, JWN, ROC, FSLR, SPW, STEC, CVC, VMED, ANF, CAR, AAWW, TRN
 

Trade: C March $5 short straddle 10,000x

The Trade

A trader sold 10,000 March $5 calls at $0.12 and sold 10,000 March $5 puts at $0.22 for a credit of $0.34 or $340,000.

Risk/Reward

As you can see from the risk reward graph above, the short straddle has unlimited risk in both directions, and limited profit potential. The max profit would occur at an underlying stock price of $5 at expiration. The max profit would be the credit of $340,000. The lower and upper break even prices of the underlying are $4.66 and $5.34, which is the strike price plus and minus the credit. Knowing the characteristics of short straddles, we know that a large move in the underlying hurts, an increase in volatility hurts, and the passage of time helps.

The lines shown in the chart above is the upper and lower break even underlying prices of $4.66 and $5.34. The 52-week range for C is a low of $3.15 and a high of $5.15.

Alternative trade

An alternative spread that is more practical for a retail investor that uses less margin is the iron fly. It's less risky than the short straddle but also has less reward. For example, a trader could have set up the iron fly by buying the March $4.50 put at $0.05, selling the March $5 put at $0.22, selling the March $5 call at $0.12, and buying the March $5.5 call at $0.03 for a total credit of $0.26 (minus commissions). Basically, the trader would be short the straddle and long the strangle.

As you can see from the risk reward graph above, the maximum profit would occur at an underlying stock price of $5. The maximum loss risk for the iron fly would be $24 per spread. The maximum profit for this spread would be the credit. The lower and upper break even prices of the underlying are $4.74 and $5.26. This profit window is $0.48, compared to the straddle's profit window of $0.68.

Trade of the Day: 2,000 January $25/$15 bull risk reversals in EXPE

The Trade

A trader sold 2,000 Jan '12 $15 puts at $0.65 and bought 2,000 Jan '12 $25 calls at $1.50 for a debit of $0.85 or $170,000.

Risk/Reward

As you can see from the risk/reward graph above, the bull reversal profits from an increase in the underlying stock. The maximum risk is being put 200,000 shares of stock if the underlying stock is trading below $15. The maximum profit potential is unlimited because we are naked long calls. The upper break even price level is $25.85. At this price level, the long calls would get exercised which would exactly offset the debit to put on the position.

The line shown in the chart above is the upper break even price of $25.85. The 52-week range for EXPE is a low of $18.30 and a high of $29.85. EXPE released Q4 2010 earnings on February 10, 2011. Expedia Inc.'s fourth quarter earnings missed which resulted in a 12.65% decrease in shares prices in after-market trading on February 11, 2011.

Another big trade this morning included a trader selling 4,000 July $17 puts and buying the July $22/$27 ratio call spread for 2,000x4,000. As of 1:00 PM EST, EXPE has traded 30,070 contracts with an average volume of 7,769.

EXPE is the 3rd largest public travel company with a 6.15B market cap. CTRP and PCLN are the two larger companies and trade at significantly higher P/E ratios.

*Hat Tip to @OptionRadar for pointing this trade out to us!

Option Flow Recap for Febuary 11, 2011

Macro / Thematic

SPX – 15,000 of the March 1300 / 1310 put spread was purchased after the close for $2.60 (SPX options trade until 4:15pm ET).

GLD – 7000 of the September 135 calls were bought for $6.15

IWM - Bearish flow this morning with an investor buying 15,000 of the June 75 /65 put spreads for $1.77; The March  79 / 72 put spread was purchased 7500x for $1.01.

EEM - Size call buying with the March 47 / 49 call spreads being bought 15,000x for $0.40

Consumer

ODP – 6000 of the March 6 calls were bought for $0.35 in a multi-exchange sweep. The company is expected to release earnings on February 22^nd before the market open.

M – 14,000 of the May 25 / 29 call spreads traded on the day and it appears to be an opening bullish position into the company’s earnings report that will be released on February 22^nd.

GRMN – Bullish flow today in Garmin. The February 34 calls are the most active with almost 3000 trading on the day. Briefing reported takeover speculation in the name.

Energy

TSO – Call activity in Tesoro was very active today on Sunoco (SUN) takeover speculation. The February 22.5 calls were the most active with over 9500 calls trading.

SD – An investor bought 10,000 January’13 7.5 puts for 1.75 and 3000 were purchased later in the day for $1.76

ENOC – 900 February 25 calls were sold at $0.30.

HK - The June 17 / 20 3x1 risk reversal traded 3000 x 1000. Buying 1000 June 20 calls and selling 3000 of the June 17 puts and collected .10

Industrials / Materials

KGC – 5000 August 20 calls were sold at $0.48

DOW – 2500 June 40 / 36 risk reversals traded. The investor bought calls and sold puts, collected $0.03

TX – 1500 February 35 calls were sold at $1.15 to open.

CAT – 2900 of the August 90 puts were sold at $3.15 to close.

Tech

NOK – One investor sold 11,000 of the July 11 calls at $0.29. The trade iss probably a liquidating trade.

MU – 5000 of the January 10 / 12.5 1x2 call ratio spread was bought for $0.40. The trade is likely a roll up in strikes.

VMED – 2500 of the February 26 calls were bought for $0.55 in a multi exchange sweep.

Financials

BX  - 12,000 of the January 20 calls were bought for 1.05. It is an opening position.

Healthcare

NVS – 6000 of the April 52.5 / 57.5 strangle was sold at $2.00

AVNR – 4200 of the September 4 calls were sold at $0.65.


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

Trade of the Day: GIS July $35/$32 put spreads 5,000x

The Trade

A trader sold 5,000 July $32 puts at $0.60 and bought 5,000 July $35 puts at $1.69 for a debit of $1.09 or $545,000.

Risk/Reward

As you can see from the risk/reward graph above, the July put spread is bearish. The maximum risk is the cost to put on the spread, the debit. The maximum profit is the dollar value of difference between the strike prices minus the debit. In this case, the maximum profit potential is $955,000. The break even underlying stock price for this spread is $33.91. At this price, the short puts would expire worthless, and the long puts would get exercised and exactly offset the debit.

The line shown in the chart above is the break even price of $33.91. The 52-week range for GIS is a low of $33.11 and a high of $38.98.

General Mills, Inc. is a global manufacturer and marketer of consumer foods sold through retail stores in more than 100 countries. The company's businesses are organized into three operating segments: U.S. Retail, International, and Bakeries and Foodservice. GIS trades an average of ... contracts daily.

General Mills will report earnings on March 23, 2011. It's interesting to note that recent grain prices haven't been this high since 2008. The U.S. Department of Agriculture predicted Wednesday that global supplies of grain including wheat, corn and soybeans would decrease 2.2% as harvests fall short. According to the USDA, U.S. supplies of corn are also limited and at 15-year lows. Furthermore, wheat and corn prices have climbed 80% or more in the last 6 months as concerns have grown about whether supplies could meet rising demand. General Mills' competitor Kellogg (K) plans to raise cereal prices 4%.

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

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