Too Many Options – Very Light Volume Day

by Enis October 22, 2012 6:55 pm • Commentary

On a day with few large prints, here is what was trading:

  1. YHOO – Most active strike today was in YHOO.  The weekly Oct 16 calls traded more than 30k times ahead of earnings tonight.
  2. LLY – Someone bought 10k of the Jan13 55 calls for 0.85 this morning.  This could have been stock replacement, as the stock has been on a big run in the past 3 months, and implied vol is below realized vol.
  3. NYT – A trader bought 10k of the Jan13 10 puts for an average price around $0.59.  NYT has rallied from 6 to 11 in the past 5 months, so the trader was likely looking to lock in gains.
  4. PCS – The excitement around a potential Sprint bid has deflated in the past 2 weeks, but someone stepped in today to sell 6k of the Jan13 10 puts at 0.50, probably a naked bullish trade.
  5. TOL – Not huge, but some put buying in the homebuilders today to lock in gains.  A buyer of 3,000 of the Jan13 34 puts paying $1.95 this morning.
  6. LEN – Possibly the same buyer, as someone bought 3k of the Jan13 36 puts for $1.90 around the same time as well.
  7. UNH – The health insurers active as well.  A trader bought 10k of the Nov 55 calls around $2.16 this morning.  Might be a play on the elections.
  8. AET – Again, could have been the same buyer here, as someone bought 10k of the Nov 45 calls around 1.12 this morning.  More buying occurred (2k lots twice) later in the day.  AET reports later this week.
  9. AMD – Stock has been beaten to a pulp in the last 6 months.  Someone bought 20k of the Jan14 5 calls to open, around $0.145 this afternoon.
  10. UTX – This name rarely trades, but someone bought the Nov 75 / 72.5 / 70 put butterfly 12k times paying $0.26, a favorable risk/reward, especially since UTX reports tomorrow morning.