Too Many Options 12/3/13: $AKAM, $EEM, $EWZ, $YHOO

by Dan December 3, 2013 4:15 pm • Commentary

1. EEM – there was a massive closing seller in Dec puts shortly before noon, could have been part of a roll that we have become accustomed to seeing early in the month, where a trader rolls about 200k slightly out of the money puts out to the next month.  Today 180,000 Dec 40 Puts were sold to close between .53 and .55.  Usually the closing print has corresponded with an opening print in the next month and slightly lower.  The largest opening buy of puts today was 40k of the March 39 puts for 1.34, so not sure if they are related.  There was also a closing seller of 20k of the Dec 37 puts at 10 cents.

2. EWZ – emerging market equities have had a bad run of late, with Brazil’s Bovespa down 4% this week a long.  Right out of the gate this morning a trader bought 12,000 Mar 42 puts in the EWZ paying 1.51 outright to open.

3. AKAM – not a name that we see a ton of options activity in normally.  A trader bought 5400 of the Feb 39/48 Risk Reversal paying .75 to open (selling put to buy call).  This is a bullish trade that breakseven on the upside on Feb expiration at 48.75 or about 3.50 higher, or gets the trader long at 39.75, down about 7.00.

4. YHOO – an interesting trade went up in the stock as it consolidates near multi year highs where a trader did one of 2 things, collared stock or bought a bullish risk reversal.  The trade was an opening trade of 21,000 Jan 41 calls for .37 vs an opening trade of 21,000 Jan 33 puts at .40.  It is hard to make out exactly what transpired as it was crossed electronically and both options traded in the middle of the market.   My guess is that the trade was bullish where the trader sold put and bought call as implied vol in the put line is down a touch (signaling a sale) and the implied vol in the calls is up a bit (signaling they were bought.)  If this was the case, the trader’s break-evens on Jan expiration are 33.03 on the downside (where he gets put the stock) and 41.03 on the upside.