Too Many Options: Almost All Tech

by Enis November 29, 2012 5:26 pm • Commentary

Very tech heavy day in the options market today.

  1. INTC – The largest single options print of the day.  The Dec / Jan13 21 put calendar traded 48k times this morning for 0.16.  The customer bought back their short Dec 21 puts, and sold the Jan13 21 puts.
  2. MSFT – Likely the same trader as the INTC, sold the Dec / Jan13 28 put calendar 36k times, collected 0.23 on the roll.  Also, two big sweeps occurred in the Jan13 25 puts, both buyers, one in the morning (at 0.21), one in the afternoon (at 0.23).  About 40k of that line traded on the day.
  3. RIMM – Again heavy volume.  The Nov30 12.5 line traded over 35K times, 24K of them calls.  Lots of trading again in the Dec and Jan’13 expiries.  Earnings are Dec 20th and the Blackberry 10 comes out in January.  GS upgraded them to a buy today.
  4. CSCO – Seller of the Jan13 20 calls to close, at 0.19 and 0.20, traded 20k times.  Taking advantage of the more than 10% rally in the last 2.5 weeks.
  5. ORCL – Buyer of more than 20k of the Jun 35 calls throughout the day, paying around 1.045 for those calls.  ORCL hit its 10 year high at 36.50 in May 2011.
  6. AAPL – Weekly 590 calls were the most active line, trading more than 60k, and the weekly 585 puts traded more than 50k.  Call to put ratio around 1.40
  7. F – Clearly sold my Feb 11 / 12 call spread too early yesterday, as F closed up 2.5% today.  The Dec 12, Jan13 11, and Feb 12 calls all traded more than 20k today, primarily buying.
  8. HLF – IV30 is in 25 points today with lots of sellers in the puts, mostly Dec and some Jan’13.  74K+ options traded today, versus an average of 7000.  Stock traded as low as $42.18 today, but is back above $45.  Vol had spiked up with put buyers the last couple of days and speculation was that some sort of announcement must be coming soon, maybe with the FDA.  I’ve not seen any news to explain either the put buying, vol spike or the turn around.
  9. DG – Lots of call buyers.  Calls to puts were 25:1.  67K options traded versus the average of 2700. Mostly heavy buying of the Dec 50 and 52.5 calls.  S&P Dow Jones Indices announced that DG will be replacing Cooper Industries PLC in the S&P 500 Index.  Earnings are Dec 12th.
  10.  OVTI – lots of options trading into earnings after the bell.  IV30 reaching highs of the year in the low 80’s.  The at-the-money straddle is trading at $2.70. Which is an implied move of 10.83% from our Implied Event Move Calculator.  The 4 quarter average earnings move is 7.4%, but 8 quarter average is 13.8%.  Almost 8000 Jan’13 19 calls have traded, looks like mostly buyers and 3500 of the Jan’13 20 calls again looks like mostly buying.