Too Many Options: Value Retailers Active

by Enis October 12, 2012 3:05 pm • Commentary

Ending a rough week for value retailers, Dollar Tree and TJ Maxx had above average options volume for the second straight day, continuing their recent descent:

  1. DLTR – After yesterday’s negative pre-announcement, and 8% drop, the stock is down another 4% on analyst downgrades.  The Oct 40 and Nov 40 puts were the most traded lines, as options were 4 times avg. volume
  2. TJX – TJX has also had a tough week, down 5% to its lowest level since July.  One very large print went up this morning, as a big player rolled their short Oct 45 puts out to the Nov 45 puts, collecting $0.57, 26,000 times.
  3. COST – COST sold off 6% from its highs after earnings on Wednesday, hitting its lowest level since August this morning.  Options traded 4x daily average, with the Oct 100 and Oct 97.5 calls the most active.
  4. STX – The STX Oct weekly 28 puts traded more than 10k, as the stock opened down near 27 after a morning downgrade, but quickly recovered above the $28 level.  The morning low in the stock coincided with the 200 day moving average, which had not been breached since Oct 2011.
  5. YHOO – The Oct 16 calls traded more than 40k, with 27k printing at 2:58 pm, someone who is long selling that option to close.  Someone also sold 17k of the Nov 16 puts at $0.545, opening.
  6. KRE – Regional bank ETF has been hit hard today (-3%) after WFC’s report showed a bad Net Interest Margin, indicating potential pressure on revenues going forward.  Buyer of 10k of the Jan13 28 puts as protection around noon.
  7. XRT – Big player sold 20k of the Oct 63 puts, and bought the Nov 62 / 58 put spread in its place, 20k times.  Essentially rolling protection forward 1 month.
  8. PXP – Big 3-way print.  Someone closed out of their bullish options structure (short put, long 1×2 call spread) in PXP, selling 15k of the Nov 40 calls, buying back 30k of the Nov 46 calls, and buying back 15k of the Nov 32 puts, all to close.
  9. JBHT – Strong earnings number sent JBHT up 6%, and options traded 6x normal volume.  The Oct 55 puts and Oct 60 calls were most active.
  10. AMD – Yesterday evening’s pre-announcement sent the shares 15% lower today.  The Jan13 3 calls were the most active line (almost 20k), with buyers initiating for the most part.  The Nov 2.5 puts also traded more than 15k.