Tuesday’s Notable Options Activity
Here is some untied, generally directional options activity that caught my eye during Tuesday’s trading:
1. XLE - saw a massive call spread buyer to open. When the etf was 79.89, a trader paid 1.70 for 55,000 June 84/89 call spreads,risking 1.70 (or $9.37 million) to make 3.30 (or about $18.3 million) if the stock is between 85.70 and 89 with the max gain above $89. Total options volume was 3.4x avg daily volume with call volume 2.5x that of puts.
2. CAM - the oil and gas e&p company saw large call volume. When the stock was $48, a trader sold 5,000 March 47.50 calls at 2.75 to close, sold 8600 Feb 47.50 calls at 1.95 to close and bought 25,000 Feb 50 calls for .95 to open. The company reported their Q4 results last week, from Thursday’s lows, to Tuesday’s highs, the stock has rallied nearly 25%.
3. SLB - saw some profit taking in prior bullish bets in the options market, when stock was 88 a trader sold 4200 Feb 86 calls at 2.97 to close, the stock is up 10% since Thursday’s lows.
4. XLU - saw a closing put seller when etf was 48.84, a trader sold 10,000 June puts at .74, when the stock was 48.42 it there was also a seller of 10,000 March 46 puts at 48 cents to close. Looks like traders are giving up on bearish bets. Today was the day that almost broke my will in the March 48/44 put spread (read here) that we put on in late December when the Utility etf was $48.50. With the stock in a similar spot the trade is a small loser, but the resilience of a bond proxy like the XLU on a day that the TLT was down 2% was just a tad frustrating.
5. CMCSA – Monday we highlighted an opening put sale in the weeklies in CMCSA:
massive opening put sale when the stock was $52.60, 45,000 of the Feb 6th weekly 54.50 puts were sold at $2.15, or $9.67 million in premium.
Yesterday when the stock was up 2.5% at $55, it looks like the trader bought back some of those puts to close for .77, netting a quick profit of $2.76 million on the 20,000 options that were covered.
6. IBM - saw an opening call seller, when the stock was 157.50 a trader sold 3500 April 170 calls at 1.00, likely an overwrite
7. FSL – saw call buying, when stock was 32 a trader paid .475 for 10,000 of the March 36/39 call spreads to open
Chart of the Day – $CMG: Burrito Loco (1)
MorningWord 2/3/15: Buyback Machines (1)
Monday’s Notable Options Activity: $AAL, $AAPL, $CMCSA, $SCTY, $UAL (1)
This post by Dan Nathan (@riskreversal) originally appeared on RiskReversal.com
