Generally a quiet day in the markets until late in the afternoon where most indices gave up all of the the morning gains. Here is a quick recap of some of the most interesting options activity on a day that saw options volumes across the entire market at about 20% lower than average.
1. NOC & LMT: It appeared that short seller of defense stocks swapped out of his short stock positions and into Jan 2014 puts.
- NOC – trader bought 16,800 Jan 110 puts for 2.45 to open and bought back 705k shares for 111.63
- LMT – trader bought 14,000 Jan 140 puts for 3.25 to open and bought back 672k shares for 141.78
2. BAC – trader bought 46,000 Dec 15 Puts for .10 to open and bought 828k shares of stock for 15.89. The second most active strike was the 16 calls with 30k trading in the Nov 29th (this Friday) and 30k trading in Dec regular expiration.
3. AAPL – stock bucked the trend in a fairly week tech tape with weekly calls coming up in the most active options list as traders apparently are looking for more upside into Black Friday with 23k of the Nov 29th 525 and 530 calls trading.
4. HPQ – stock saw an uptick in options activity a day before they report their fiscal Q4 tomorrow after the close (read our preview here). HPQ options traded more than 3x average daily volume for a total of 101,000 options, nearly evenly split put puts and calls with the 2 most active strikes, 9800 of the Dec 25 puts and 8,000 of the Nov 29th 26 calls.
5. HLF – on a day that saw Pershing Square’s Bill Ackman make his bear case for HLF (read here), one investor apparently collared a long stock position of 200,000 shares by selling 2000 May 85 call at 3.40 and using the proceeds to buy 2000 of the May 70/62.50 put spread for 3.80. The package cost .40 and offers protection on May expiration from 69.60 down to 62.50, while offering further upside potential from the long stock from 70.40 to 85, but at 85 or higher his stock is called away.