Too Many Options: Semis and $SPX active

by Enis December 11, 2012 7:22 pm • Commentary

TXN’s in-line sales forecast last night caused a semiconductor sector rally, and heavy options trading as a result.  Also, one very large trade in the SPX index options.

  1. SPX – Large 5 way structure near noon.  Someone bought 8,737 of the Mar 1325 calls, 8,380 of the Mar 1400 calls, sold 26,211 of the Mar 1450 calls, sold 25,140 of the Mar 1500 calls, and bought 26,300 of the Sept 1425 calls, paid $250mm.  The trade was long $1.25 billion of SPX delta, so a bullish bet (though you never know what else the same institution is doing), net selling vol in March and buying vol in September
  2. TXN – About 4x avg options volume, with more puts trading than calls, mostly weekly put buyers in the morning, but the stock closed up 4%, near the highs.  Most traded line was the Jan14 35 calls trading at 1.37, buyer initiated.
  3. INTC – The TXN optimism translated into a rally in INTC too, up 2.5%.  The Dec 21 calls were the most active, with a large seller near noon, selling around 20k at 0.18.
  4. NVDA – Another semi name with active call volume, with the Jan13 14 calls trading more than 13k, mostly one buy sweep in the afternoon at 0.22.
  5. AIG – Calls were very active, with the weekly 34, Dec 36, and Jan13 35 calls all trading more than 15k.  There was more overwriting in the morning, but call buying picked up in the afternoon as the stock moved above $35
  6. GE – The Dec 22 calls traded almost 30k, with one large buyer sweeping at 0.13 and 0.14 in the afternoon.
  7. TIVO – Stock is up more than 20% in the last 2 weeks, triggered by strong earnings in late November.  The Dec 12 calls were most active today, trading more than 4k.
  8. DG – The Dec 44 and Dec 33 puts both traded more than 10k as the stock sold off throughout the day to end down 8% after weak earnings.
  9. IYR – 10k of the March 67 calls traded at 0.49, looks like a seller.
  10. SKS – A rarely traded name.  Trader bought 5,500 of the May 11 puts around 1.30 top open, targeting new lows in the name in the next 6 months.