Too Many Options: $TWTR, $FB, $XLE, $MRVL, $ATML

by Enis December 27, 2013 8:20 am • Commentary

Twitter dominated options volumes, trading almost 10x its 1 month average call volume.  The stock had its largest volume day since its IPO, trading over 82 million shares (vs. a total float of 80 million).

1.  TWTR – The newly listed Jan18th 90, 85 and 95 calls were the most active lines, all trading over 65k for the day.  The 1 month implied volatility increased around 25 points from Tuesday to Thursday, which I discussed in my CotD post yesterday midday.  Twitter has traded more puts than calls since its IPO, but the call to put ratio was over 2 yesterday.  9 of the top 10 most traded lines were called (mostly Jan18th), with the weekly 70 puts the only put line in the top 10.

2.  FB – Facebook had only its second down day in the past 10.  Options volumes, however, were still massively skewed towards calls, at about 2.75 to 1.  The Jan18th 60 calls were the most active line for the second straight day, trading over 50k at an average price of $1.33.

3.  XLE – The Energy ETF is one of the few major sector ETFs that has failed to make a new high in December.  A big buyer of protection on yesterday’s rally, with almost 100k of the Jan18th 87 puts trading for an average price of $0.825, buyer initiated.

4.  MRVL – Stock rallied 2.5% on heavy call volume (10x 1 month average).  The Feb 14 calls traded over 20k, mostly buyer initiated, at an average price of $0.80.  MRVL’s high this year was $14.64.

5.  ATML – Another chip company that saw active call buying.  The Jan18th 8 calls traded over 25k throughout the day, at an average price of $0.275.  Stock has not traded above $14 since August.