Too Many Options 11/21/13: $BAC, $DG, $EFA, $PEP, $WFC

by Dan November 21, 2013 4:01 pm • Commentary

1. BAC – stock broke out to a new 52 week high today, now up almost 13% from the Nov 7th lows of this month. The most active options line was the Jan 15 calls with over 43k trading as of 3pm.  An interesting trade in the name today was a buyer of the Jan2015 15/10 Put Spread paying 1.29 for 10k, this could have been a long holder rolling up protection as there is 245k open interest in the 10 puts and 153k in the 15 puts.

2. DG – the stock was down in sympathy with dollar store peer DLTR’s miss overnight.  The stock spent the day grinding higher to close on the highs, with it seeing a buyer of 20k of the May 75 calls to open for .85. The company will report their Q3 on Dec 5th and the options market is already implying a one day move of about 4%.

3. ADM – Buyer of 53,000 March 42 calls to open for 2.20, this is now the single largest strike of open interest int he name.

4. PEP – a trader rolls down some calls, sold 10k Jan 90 calls at .25 to close and bought 7500 Jan 87.50 calls for .69 to open

5. F – right out of the gate, shortly after the open, a trader bought 25,000 Jan 18 calls for .29, could have been closing, possibly an overwrite as they were not marked to open

6. WFC – A trader rolls up and out long dated calls, sells to close 18,500 Jan 2015 40 calls at 5.70, and buys 19k Jan 2016 45 calls for 4.20 and bought 365k shares for 44.39, obviously a very bullish trade, but  I honestly have no idea why the Jan16 calls look that attractive aside from the defined risk.

7. EFA – Buyer of 56,000 Dec 67 calls to open for .34 shortly after noon, then the buyer comes back at 3pm and buys another 55,000 Dec 39 calls for .39.  EFA is an ETF that tracks the performance of the MSCI EAFE (Europe, Australia and Far East), but very heavy Europe.