Too Many Options – Most Actives from Friday and Today

by Kristen October 31, 2012 7:35 pm • Commentary

We wanted to combine Friday’s and today’s posts to catch up on the active trades, and highlight the fact that NFLX and TRIP have been especially active the past 2 trading days.  First, here are 5 of the most active names from today:


  1. NFLX – Rare to see this, but the weekly options expiring Nov 2nd, this Friday, made up the 4 most traded option lines (the weekly 75 and 70 calls, and the weekly 70 and 65 puts).  Activity in the regular expiry Nov 80 and 85 calls picked up a lot after the Icahn news hit the tape.
  2. TRIP – off the charts again at over seven times average option volume. Calls to puts were 1.7:1. Expedia’s good earnings and upward stock move on the 25th has gotten traders excited to see what TRIP does tomorrow after the bell. Much of the volume was a Nov 31/35 call, 25 put spread that went up 5800 times. It looks like the puts and 35 calls were sold and the 31 calls bought. Implied vol is trading off the charts since options were initiated, Chart courtesy of LiveVol: red iv30, yellow, iv60, green iv90, blue historic vol hv30, dark blue hv60.     At over 85 for iv30. The at-the-money front month straddle is trading 98 vol. The earnings implied move from our calculator is 15.76% or about $4.70.
  3. F – The stock was up almost 8% (with GM up almost 9%) after a great quarter in North America.  The Nov 11, Dec 12, and Nov 10 calls were the 3 most traded lines, all more than 20k on the day
  4. GRPN – The largest single stock print of the day.  Someone bought 30k of the Jan14 5 calls paying 1.20 in the afternoon, with GRPN closing -8%.  That’s an 83 implied vol, as breakeven is up more than 50% in the stock over the next year (which might actually be cheap)
  5. JDSU – Stock was down 6% on weak revenues and revenue guidance.  Someone rolled about 14k of the Nov 10 puts out into 8k of the Dec 9 puts 

Here is what traded actively on Friday, Oct. 26th:

  1. WMB – The Nov17 31/39 strangle traded 25K times, looks like it was sold. Open interest on the 39 calls is 68K, but only 3K on the 31puts. Earnings are October 30th after the close. Implied vol on the line was historically high near 37 and has come in a little over a point. Two days ago someone sold almost 25K of the Nov17 32 puts.
  2. VRSN – The name traded over 96K options today versus an average of 1000. A lot of Jan’13 41/45 call spreads and Jan’13 42 and 47 buywrites traded according to LiveVol. Open interest was small on all but the Jan’13 40 line which traded 9K times with similar open interest. The Dec22 45 calls traded over 10K times.  They reported earnings yesterday that beat estimates slightly, but said the Commerce Department may not complete its contract review before it expires on November 30th. Stock is down over $8 or 18%. 30-day implied vol is up 8 pts.
  3. TRIP – Over 12K options have traded versus an average of less than 3K. 1:2.4 calls to puts. The Nov 30/27 put spread traded 1460 times. And the Nov 28 puts traded over 1200 times.  And the Dec 37/32 call spread 1500 times.  IV30 is up 12%. Earnings are Oct 30th. Expedia had good earnings and upgrades today.
  4. PCLN – the stock was up almost $25 or 4 ½ %, also thought to be on Expedia news. Almost 70K options have traded versus an average of under 36K. Most of the trading has been in the Oct26 expiring options. Earnings aren’t until Nov 5th so there are also Nov2 weeklies also before earnings.
  5. NFLX – Went crazy today. 200K+ options trading versus an average of 47K. Here is a chart of the stock during the day:

After a negative reaction to earnings that brought stock down to mid $57’s, stock rallied today and then a rumor circulated in the afternoon MSFT might be interested in buying NFLX bringing stock close to $70. IV30 is up 9 points today or over 17%. Most trading has been in the Oct26, Nov2, and Nov17 options. But the Jan’13 120 calls and puts traded 1817 and 2802 times in a “spread” so possibly a reversal or conversion and later the Jan’13 150 calls and 320 calls traded 2280 and 3572 times in a spread.  There was open interest in all those lines.