Too Many Options: $AAPL, $FB, $TC, $JNJ, $AMAT, $ PAYX, $XHB

by Dan September 6, 2013 4:00 pm • Commentary

Single stock options blocks ruled the unusual activity on what was a volatile session in the morning, only to spend the afternoon praying for the weekend to come.

  1. AAPL: the three most actively traded single stock options were the AAPL this week expiration (today) 500 calls, 495 calls and 495 puts where over 50k of each traded.
  2. FB:  the stock continues its eye popping gains, making new 52 week highs today, as options traders scramble to roll up call strikes.   The larges trade in the name looked to be a sale of 21,000 Sept 45 calls at .95 to close, while the trader bought 21,000 of the Sept 46 calls for .60 to open.
  3. TC:  Not a name that I have ever even heard of, but a trader sold to open 41,633 of the Mar 5 Puts at 1.45 to open.  TC is a mining company with a $655 million market cap company that is down small on the year, but has recently rallied almost 30% in the last month.
  4. JNJ:  Looks like a potential overwriting situation where a holder of JNJ shares is rolling the yield enhancement strategy down and out.  A trader bought to close 17,246 Oct 95 calls for .12 and then sold 11,543 Nov 90 calls at 1.13 to open.  If the stock is below 90 on Nov expiration the trader would collect 1.13, or approximately 1.3% of the underlying stock price.
  5. AMAT:  Shortly after noon today 29,000 AMAT Oct 16 calls were Sold to open at .30. Some market participants are reporting that the options were bought by the customer, but a broker on the CBOE floor, where the block traded, told me that the bid was .32 when the order came to the floor, the bid was hit and the block was crossed at .30, which would clearly indicate a seller.  Also 30 day at the money implied volatility is down almost 1 point today which would also indicate selling pressure.
  6. PAYX:  decent size roll this morning, a trader sells 20,000 of the Sept 41 calls at .05 to close and buys 20,000 of the Dec 40 calls for .73
  7. XHB & IYR:  Appears that traders did not know what to do today with the weak jobs print, as yield plays got a bounce.  Right out of the gate this morning a trader sold 16,000 XHB Sept 28 Puts to close at .35 possibly thinking that with bonds rallying that the floor was in for some yield plays.  Also in IYR a trader sold the Jan 2015 40/50 put spread 5800x at 1.64 to close.