Too Many Options: Call Trading Dominant

by Enis December 13, 2012 5:23 pm • Commentary

Calls and call spreads made up the bulk of the top trades today.

  1. AAPL – Most active single name by a long shot today, as single stock options were quiet.  Call to put ratio around 1.3, and the weekly 540 and 535 calls were the most active, trading more than 30k
  2. PSX – lots of trading in the calls. Option volume was close to 100K versus an average around 13K and calls to puts 4.3:1. Stock is down 2.5% and IV30 in 10%. There was a seller of 20K+ Jan’13 60 calls. The Dec 50 calls have traded 20K times and the puts over 6K times and implied vol on the line is in 5 points. The Dec 50 / Feb 55 call spread was sold 20k times. The CEO Greg Garland spoke at an investor meeting today in NY and announced the formation of a master limited partnership (MLP) for the second half of 2013 to raise $300-$400 million in cash.
  3. HPQ – The Dec 15 calls traded almost 40k, with a large buyer in the morning.  Stock is up almost 30% from its November capitulation low
  4. CLWR – Sprint finally formalized its takeover offer. IV30 came in 41 points today on sellers of the Mar 3.5call / 3 put straddle 25K times. There was a lot of volume in the Dec22 3 calls (20K) and the Jan’13 2.5 (10K) and 3 calls (18K).
  5. BIG – continues to be a lot of trading since earnings and a WSJ article saying that the CEO is being investigated for selling shares before the announcement of slowing sales which caused stock to go down. Today there were good sized buyers of the Jan’13 30 calls, 9500 traded.
  6. F – The Jan13 12.5 calls traded more than 40k, in what looked like mostly buying.
  7. SPW – Implied vol at highs for the year. A lot of call buying particularly in the Jan 70’s. SPW was rumored to be bidding for GDI. Stock fell $6 on the reports on Dec 11th
  8. MDRX – 20K Dec 11/ Mar 13 call spreads look like they were bought. Both lines have that much open interest. Vol has spiked up since November on rumors of a buyout
  9. MYL – interesting generic pharmaceutical company, a lot of trading in the calls today. Stock has been on an upward trajectory since late October. 5K Dec 25 / Jan’13 27 call spreads were bought. 3K Apr 27/30 call spreads were bought. Looks like people looking for good news in the future. Earnings should be in February. News over the fall looked positive for them with a number of generic drugs approved and selected as a suppliers to South Africa Department of Health anti-retroviral tender.
  10. FB – Heavy stock and options volume today.  The weeklies were most active, led surprisingly by the 27.50 puts, surprising since the stock was green almost the entire day.