Too Many Options – Calls Galore

by Enis October 16, 2012 4:47 pm • Commentary

Some big calls and call spreads traded today:

  1. LYB – Someone bought more than 50k of the Nov 57.5 / 60 call spread paying 0.60 and 0.65 between 12 and 1pm.  Commentary from GS analysts that ethylene prices could rise further given constrained production capacity.  That one spread doubled the open interest in the name.
  2. WLK – Since we’re on the topic, WLK in same space as LYB, and also doubled its open interest, with the Apr 70 / 80 risk reversal (likely buying call) the most traded print.
  3. GDX – Someone traded a huge structure:  bought 25k of the Nov 60 calls for 0.17, bought 25k of the Nov 52 calls for 2.13, bought 50k of the Oct 54 calls for 0.16, sold 50k of the Nov 56 calls at 0.59, sold 12,500 Nov 50 puts at 0.88, and sold 25,000 Oct 50 calls at 2.52.  Basically, they rolled their long Oct 50 calls into a Nov 52 / 56 / 60 butterfly, and into some cheap Oct 54 calls (and sold some Nov 50 puts for good measure).
  4. TYC – More than 70k of the Jan13 30 calls traded, for an average of 0.527, mostly buying in 2 big blocks.  The implied vol went up 2.5 points in Jan13 off the back of this buying.
  5. MUR – Someone sold their long 20k of the Jan13 62.5 calls for a nice gain, and rolled that premium into buying 40k of the Jan13 65 calls vs. selling 20k of the Jan13 70 calls.  The stock was up 8% as a result of announcing a downstream spinoff, and a special dividend and buyback.
  6. ETFC – One of the only large put option lines to trade actively today.  More than 19k of the Oct 9 puts traded, as a buyer emerged this morning, paying 0.15.  Stock reports Wednesday after the close.
  7. TLT – Very large trade for this ETF, as one big player sold 21k of the Oct 124 puts at 1.58, to buy 56,000 of the Nov 122 puts for 2.15, rolling their protection down
  8. HUN – Another large, multiple leg print.  Trader sold 23k of the Nov 13 calls to close for a gain, and rolled that premium into buying 18k of the Jan13 14 calls and 7k of the Jan13 15 calls.
  9. ISRG – Traded 9 times normal volume as traders set up ahead of the earnings report this afternoon, with Oct puts and calls dominating the volume.  Stock has basically reversed today’s +4% move in current after-hours trading.
  10. DPZ – The pizza maker was up 7.5% on a strong earnings number, and options traded 9 times normal volume.  Oct calls were most active as traders took profits and rolled positions.