Macro ETF’s dominated options volume given the FOMC announcement yesterday. The VIX closed down 15%, and the SPY ETF actually traded its highest single day volume since June (and one of the highest in 2013). As for single stock options, here were some of the notable prints:
1. MU – Huge options volume in Micron, almost triple the 1 month average, with 2x as many calls trading as puts. Buyer of 26k of the Jan15 15 puts for 1.20 in the morning, which was the largest trade of the day. The stock was down as much as 9% at one point on concerns about competitor SK Hynix planning to build a new DRAM factory.
2. DOW – DOW Customer sold 11,604 of the Jan14 40 calls at 3.60, and sold 23,155 of the Jan14 42 calls at 2.0648, as well as bought 60k of the Jan14 44 calls for 1.01. The stock hit a new 5 year high on Wednesday’s strength. Jan14 expiry does NOT capture earnings.
3. KMI -the Buyer of the Jan15/Jan16 30 call calendar 0.85 for 6k. Also bought 5k of the Jan15/Jan16 32.5 call calendar for 1.15. Looks like a trader rolling out long calls from Jan15 to Jan16. KMI is actually down 3% in 2013.
4. WETF – Trader bought 16,500 of the WETF Jan14 17.5 puts for 1.40 vs. long stock. The stock hit a new all-time high yesterday, and is up almost 15% just this week. That’s a large options print for Wisdomtree, which averages less than 1k options per day.
5. CTRP – Interesting trade in Chinese online travel service CTRP. A trader bought the Jan 41/55 Risk Reversal (they bought the Jan 41 Put and sold the Jan 55 call) for even money 9,000x, this could be a collar against a long stock position. CTRP’s high in 2013 is around $61. Low since its August earnings gap higher is $41.19.
6. JCP – Trader bought 8,770 of the Jan16 5 puts for 1.77 to open. That’s quite a trade, considering that the max that the Jan16 5 put can be worth is $5 if JCP stock becomes worthless. Break-even on the put is down at $3.23. Those puts were almost surely bought by an owner of JCP debt, protecting against a potential future default. That line already has 80k of open interest, with the bulk of it trading above $2. A lot of distressed debt traders involved in the options market now.
7. MBI – Someone sold 8,720 of the Jan15 5 puts at 0.46. Meanwhile, 27k of the Jan14 5 puts were bought to close for 0.04. MBI last traded below $5 in early 2010.