Inaugural Edition of: Too Many Options – Most Interesting Options Activity of the Day

by Enis October 8, 2012 4:28 pm • Commentary

Each trading day after the close, we will use the Too Many Options post to sum up the most intriguing options activity that traded that day.  Oftentimes that will mean the most heavily traded options lines.  But we will also use the space to detail trades in less frequented names that stand out for their unusual volume relative to an average day, or because of potential acquisitions or corporate activity.

One important point:  descriptions here are not endorsements for these trades.  We are just providing interesting color that might be of use in the future, to keep all of us abreast of active options trading.

On to today’s action…

Since it’s the inaugural post, I’ll start today with 10 interesting lines that traded today (in no particular order, with ticker symbols in front):

  1. GLW – More than 60k of the GLW Jan13 15 calls traded, with the majority (52k) printing at 2:13 pm, at $0.22.  These calls were very likely sold, potentially an overwrite from a large holder of the stock
  2. AAPL – Though 5 of the top 10 most traded lines in the market were in AAPL today, the activity was lighter than it has been in the past week, as AAPL options have tended to trade more actively on up days over the past few months, when call buyers get active
  3. KMX – Carmax is trading 10 times normal volume, with the Apr 35 calls the most active line, as the stock surges almost 10% after ITG research said sales growth is accelerating
  4. MPC – Marathon Petroleum alost trading 10 times normal volume, as the stock hit new all time highs this morning (up 10% at one point).  Nov 55 and Nov 57.5 calls the most active lines.  This stock has almost doubled in 4 months
  5. JPM – An institution sold 15k of the JPM Jan13 41 calls, to buy 15k of the Jan13 43 calls and 15k of the Jan13 46 calls.  Looks like a case of taking some partial profits and rolling up call strikes
  6. VRNG – This stock has been embroiled in a patent battle with GOOG, and has surged in the past week on court-related speculation.  Big Oct and Nov call volume, mostly buying, as Oct and Nov implied vol trade near 250!
  7. LLY – More than 15k of the Oct 50 calls traded as LLY surged more than 5% after the release of favorable study data for its potential Alzheimer’s disease treatment.
  8. DELL – The Nov 10 calls and Nov 10 puts both traded more than 15k times, as it looks like someone was specifically buying November options in DELL as a bet on higher volatility over the next 6 weeks in DELL (implied volatility was more than 2 points higher in Nov)
  9. QLIK – This is a $1.7 billion market cap software company that rarely trades any options.  But there have been aggressive buyers of Oct and Nov calls today, with the stock up 5%, sending implied volatility higher across both terms.
  10. CNX – Saved the largest for last.  The most active name of the day today.  One large institution sold out of its long Jan13 29 puts, 85k times, at $1.71, and bought 82k of the Jan13 31 / 25 put spread for $1.73 in its place.