Too Many Options 12/2/13: $AVP, $GOGO, $ORCL, $VIX, $XLF

by Dan December 2, 2013 5:06 pm • Commentary

1. ORCL – Stock traded at 6 month highs this morning, just a couple weeks away from their estimated  fiscal Q2 earnings on Dec 18th.   A trader bought 15,000 of the Dec 34 puts for .45 to open, 26,000 traded on the day.

2. VIX – The fear index closed just below its 200 and 50 day moving averages and above 14 for the first time since mid October.  A trader bought 50,000 of the April 24 calls paying 1.10.

3. AVP – despite closing 28% from the 52 week highs made in August, the stock is still up 23% on the year.  Looks like a trader rolled some puts in Jan, selling 8,000 Jan 20 puts to close at 2.45 and bought 8,000 Jan 17 Puts for .40 to open.  This could be long holder rolling down put strikes.  There was also a buyer of 5,000 of the Apr 17 calls for 1.85, looked closing, so possibly a long holder closing an overwrite.

4. XLF – late in the day there was buyer of 30,000 Jan 23 calls, paying .06 to open, looks like a dollar cheap, low premium way to make a long shot bet that the index breaks out in the New Year.

5. GOGO – The stock closed at a new all time high, up 17.4% on the day after news that the company got preliminary permission to install their satellite technology in Boeing 747-400 planes.  Options volume was nearly 5 times average  with the largest trade the Jan 30 / 35 1×2 call spread with the trader putting it on for even money.  The trade makes up to 5.00 btwn 30 and 35 on Jan expiration, the payout trails off btwn 35 and 40 and starts to lose above 40.  I hate this trade on an outright basis in a stock as crazy (and with short interest) as this, but it is likely an overlay against a long stock position, which would make sense if that trader is leveraging to a spot they would sell at anyway.