Too Many Options 11/11/13: $EEM, $FB, $MSFT, $SINA, $WMB

by Dan November 11, 2013 4:41 pm • Commentary


  1. EEM –  The usual suspect was back with his monthly role down and out of puts.  A trader sold to close 210k Nov 42.50 Puts at 1.60 and bought 250k of the Dec 41.50 Puts for 1.55 to open.  Also late in the day there was a fairly large trade in Dec Risk Reversals where a trader Sold 30k Dec 38 Puts at .34, and bought 30k Dec 44 Calls and sold 870k shares at 40.96.  This trade was followed up by a sale of 20k Dec 49.5 Puts at .67, a buy of 20k Dec 43 Calls for .28 and a sale of 1,080,000 shares at 40.93.
  2. WMB – The largest single stock option block today was 30k WMB Jan 39 calls were bought for .20, looked to be closing, 59k traded on the day, while 29k of the Jan 37 calls were sold to close, this could have been a trader shutting down a ratio call spread.  There was also a closing seller of 32,500 of the Jan 40 calls at .12
  3. MSFT –continues to see heavy call volume as investors digest expected management changes.  Today a trader appeared to be taking profits by selling the Jan 33/36 call spread, 20,000x at 2.50 to close.  Additionally there appeared to be a trader rolling up and out a bullish bet by selling 7100 Nov 35 calls at 2.56 to close and bought Feb 40 calls for .74 to open.
  4. SINA- The Chinese internet company reports earnings after the close tomorrow night, the options market is implying about a 10% move vs the 4 qtr avg of only about 6%.   With the stock down 15% in the last few weeks since making new 2 year highs in mid October, a trader closes a bullish bet by selling the Dec 90/110 call spread at 1.12.  This seems like an odd sale considering it is a $20 wide call spread with an event and over a month to expiration in a stock that has the potential to make large moves with or without news.
  5. FB – with the stock making its 3rd consecutive close below its 50 day moving average and approaching key near term technical support at $45, a trader closed a now seemingly ambitious bullish bet by selling to close 12,500 Dec 60 calls at .19.   Call activity outweighed puts in the stock today by almost 2 to 1 with a total of 287k calls to 149k puts.  The most active line on the day was the Dec 50 calls with almost 25k trading.