Too Many Options: $BAC, $EBAY, $FB, $GM, $VIX

by Dan January 6, 2014 5:30 pm • Commentary

1. BAC – the stock continued its parabolic move, now up 7% in just 3 trading days in 2014.  IN one large block trade one investor was looking down, possibly looking for a dollar cheap hedge into next Wednesday’s Q4 earnings report, buying 20,000 of the Feb 16/15 put spreads for 20 cents.  Despite the bearish bet, BAC calls were some of the most active among single stocks, with 68,000 Jan 17 calls trading and 27,000 Jan 16 calls trading.

2. EBAY – got hammered today, down almost 4% at the lows on speculation from Morgan Stanley that the company may be forced to lower long term guidance when they report their Q4 results on January 22nd.   Looked like a sizable roll traded in Jan weekly calls where one trader sold 52k Jan 24th expiration 56 calls at .36 to close and bought 27k Jan 24th 52 calls for 1.71 to open.

3. FB – TWTR’s pain was FB’s gain, as FB shares closed up nearly 5% on a day that saw Morgan Stanley downgrade the stock to a Sell.  At about 11am a trader paid 2.45 for 2500 of the FB June 60/70 call spreads, 20,000 ended up trading on the day, with the spread worth almost $3. on the close.

4. GM – the stock recovered most of yesterday’s losses (the worst decline since August) after posting worse than expected U.S. Dec  sales, but up 2.1% today.  For the second straight day the stock saw heavy call volume, as 45k Jan 42 calls traded yesterday, most closing for .31, while today it looked like a trader bought to close a little more than 50,000 Jan 42 calls for .22, this could have been an overwrite vs a long stock position.

5. VIX – largest trade in the index today was a buyer of 40,000 Feb 20/25 call spreads paying .21