Too Many Options – Sprint Takeover Dominates

by Enis October 15, 2012 4:11 pm • Commentary

The top 4 lines traded in the single stock options market were all related to Sprint, as the Softbank offer was digested by the options market.  Today’s top 10:


  1. S – Most active lines were the Nov 6 and Feb 6 lines, mainly selling, as the nature of the Softbank offer reduced odds of a big move higher.  See this post from the Kid Dynamite blog for an explanation of why.  Jan14 options were also active, for more complicated reasons that we might post about in the coming days.
  2. WFC – Someone rolled their short Oct 35 puts out to the Nov 35 line, buying back 17k of the Oct 35 puts to sell 17k of the Nov 35 puts, collecting $0.48.
  3. CSCO – The Nov 19 puts were especially active, trading more than 17k by the close, as it looks like there was a morning buyer paying up to 1.06, possibly for earnings protection.
  4. JCP – A trader who was originally long the JCP Nov 21 / 17 1×2 put spread bought back his short Nov 17 strike for 0.085, 40k.  The same trader closed out of his long Nov 21 puts last month.
  5. TOL – Someone closed out of their long Dec 36 puts, 9k times at around $4.125, and rolled that protection down to 12k of the Dec 32 puts, paying $1.85 for those.
  6. AA – Someone bought 11k of the AA Jan13 9 strangle for $1.13, 11k times.  Interesting trade since AA has been stuck between $8 and $10 since April.
  7. BAC – BAC rallied along with C on strong C earnings today, and call buying resumed, as the Oct 10, Nov 10, and Oct 9.5 call strikes all traded more than 30k.
  8. INTC – Stock reports tomorrow after the close.  More than 27k of the Oct 22.5 calls traded at an average of $0.21 as traders set up for the report, implying about 5% move.
  9. CLWR – The stock has now doubled in the last week as traders anticipate Softbank / Sprint to buy them.  The Dec 3, Oct 3, and Dec 2.5 calls all traded more than 10k contracts
  10. VMED – Traded more than 20 times normal options volume as the stock rallied 4% on strong stock volume as well.