Too Many Options: Phone Stocks Active

by Enis October 10, 2012 4:22 pm • Commentary

Nokia, MetroPCS, and AT&T with some large trades today, hence the phone theme for today:

  1. NOK – A large player bought 44,000 of the Jan14 5 calls for $0.37.  The stock is down almost 50% in 2012, and more than 90% in the past 5 years.  15 months is a long time in a broken story like this, interesting purchase.
  2. MBI – Another large trade in Jan14, this time on the downside.  Buyer of 55,000 of the Jan14 5 puts for around $0.60.  This trade is likely related to a trader or investor in MBI bonds or credit, as it is longer dated equity protection on a high-yield name (generally buy credit, buy puts).
  3. MSFT – Very active across many lines in MSFT today.  The Nov 30 calls, which have traded more than 40k, have been sold for the most part, with an avg price of $0.41, and the Jan13 25 puts, which have traded more than 20k, have also been sold at $0.30.
  4. PCS – The midday headline that Sprint is going to take its time in considering a potential bid for PCS caused a flurry of activity in both the stocks and the options.  Most traded lines are Oct 12 and Nov 13 calls, as traders sold out of their near dated calls after the headline deflated expectations for a near-term bid.  Jan13 implied vol now trades above Nov as traders anticipate that Sprint might still bid before Jan13 expiry.
  5. T – Someone sold 10k of the Jan13 33 puts at $0.35.  Could be a closing trade based on open interest of 27k.
  6. AOL – This stock does not normally see much option volume, but someone bought 4,500 of the Nov 34 puts at $0.80 to open today.  The stock has more than doubled this year, so might be locking in gains ahead of earnings.
  7. FXI – The Nov 37 calls traded more than 75k, primarily buying, with the bulk of it coming this morning around $0.35 to $0.36.  Breakeven on this trade is a 6% rally over the 6 weeks, potentially betting on Chinese stimulus
  8. FB – The Dec 17 puts traded more than 20k, with the bulk of it coming between 10:30 and 10:45 am, most it looks to be buying.
  9. TRLG –  I mentioned the jeans maker on CNBC’s Halftime Report today.  The stock has hired advisors to research a possible sale.  With the stock up more than 20%, Oct and Nov puts and calls were all active, as options traded 25 times normal volume.
  10. BKS – I mentioned BKS in my CotD post a couple weeks ago.  Since then, the stock has rallied 20%, and today looked like Johnny-come-lately call buying (so much activity after the stock has already rallied 30% in one month), as the Oct 15, Jan13 16, and Jan13 21 calls all traded more than 2k times, mostly buying.  Almost 10 times normal options volume.