1. XLF – largest single option block that traded today was a buy of 161,000 Dec 22 calls with the buyer paying .13 to open when the stock was 21.57 when the etf was just .04 from yesterday’s all time highs. This is a fairly dollar and vol cheap way to play for a continued break-out in the banks for the next couple weeks. I would also add that traders knowing that the FOMC’s final meeting of the year that falls in Dec expiration may be looking for cheap upside bets in the event that the Fed induces the very blow-off rally that so many pundits are expecting into year end.
2. EBAY – With the stock making new 52 week lows this morning, with the backdrop of new all time highs in major equity indices, one trader took a long term bullish position that breaks-even up 28% from current levels in July expiration. The July 62.50/65 Call Spread was bought 50,000x for .275. Prior to that trade, another bullish trade went up but in Jan, where the trader bought the Jan 2015 52.50/65 call spread 10,000x for 2.93.
3. NUAN – the speech recognition software maker got drilled, closing at the lows of the days, down 18%, at new 3 year lows. The Dec 13 puts were the most actively traded option on the day with more than 56,000 trading hands. Whats interesting to note that many of them were sold shortly after the open as the stock was trading about $1 higher than where it closed. There were about 17,000 Dec 13 puts sold at .15, and then another 10,000 were sold around noon at .25. These options went out at .40, so traders looked to quickly monetize hedges.
4. YUM – The stock is up about 20% from the Oct lows in what seems like a straight line. Today a trader rolled up some puts by selling to close 37,800 of the Dec 65 puts at .11 and bought 37,000 Dec 70 puts to open for .31. It is also looks like the trader sold 37,500 Dec 85 calls to open at .20 to finance the trade. This looks like a good old fashioned collar where the trader is looking to put on some disaster protection for a long stock position. The first week of Dec should see the company issue an update on Nov sales comps in China, this has been a cause for volatility in the shares over the past 2 years.
5. XOP – Crude Oil continues to be stuck in the mud so to speak. A trader rolled out some puts in the oil and gas etf, by selling to close 41k Dec 64 puts and buying to open 30k Jan 64 puts. Also in XLE, a trader bought the Dec quarterly 85/83 put spread 10,000x to open for .37
6. VIX – there continues to be upside buyers of VIX calls in good size from Feb out to May. Today a trader bought 50k April 24 calls paying 1.10
7. GM – There were 2 separate buyers who had nearly the same idea, playing GM for a technical breakout in Jan once the Government has exited its stake. In the morning there was a buyer of the Jan 38/41 1×2 call spread 4400 x 8800 for .52 & in the afternoon a buyer of Jan 39/42 1×2 cs 2500 x 5k for .47