Too Many Options: Light Holiday Trading

by Enis November 20, 2012 3:49 pm • Commentary

Low Options Volume today as Thanksgiving approaches.  Technology names were the most active, led by none other than AAPL.

  1. AAPL – Most active lines were the weekly 550 and 560 puts, trading more than 30k each.  Call to put ratio was about 1.15, so relatively cautious trading on the day.
  2. HPQ – With the Autonomy write-down and the stock’s 10%+ decline, options activity was above average.  Interestingly, the weekly 12 calls were the most traded line, over 25k, dominated by early morning buying.  Activity across months concentrated around the 11 and 12 lines.
  3. RIMM – Stock touched 10 this morning for the first time since June, and that created interest in the weekly 10 calls, the most traded line of the day, around 20k
  4. CSCO – Looks like there was a seller to close of 20k of the Jan13 20 calls at 0.075 midday.  Breakeven on that is an incremental 10% rally in the stock.
  5. JCP – LBO rumors surfaced midday, causing a flurry of activity in the stock and the options.  Largest print was a buyer of 10k of the Jan14 10 puts paying $1.39.
  6. GMCR – Large multi-legged print as the stock flirted with $30 today.  Someone rolled their call options up, selling 16k of the Dec 27 calls at 4.10, 6k of the Dec 28 calls at 3.60, buying 30k of the Dec 30 calls for 2.90, bought 11k of the Dec 31 calls for 2.40, and sold 19k of the Dec 33 calls at 1.635
  7. DSW – Options traded almost 10x normal volume (still low volume) as the stock beat estimates.  The Dec 65, Dec 70, and Jan13 70 calls were most active.
  8. CI – Someone bought 10k of the Jul 50 / 40 put spread for a 2.61 debit, protecting gains as Cigna has had a strong run in the past 6 months.
  9. XRT – Someone rolled their protection up and out, selling 25k of the Dec 60 /56 put spread to buy 25k of the Jan13 62 / 58 put spread
  10. LMT – Options traded almost 5 times normal volume, dominated by the Dec 92.5 and Dec 87.5 puts, as traders positioned for potential fiscal cliff impacts