Too Many Options: $BAC, $GM, $XLF, $EEM, $TWTR, $UPS, $SLW

by Enis January 6, 2014 7:19 am • Commentary

On a day of light volume when the indices were mostly unchanged, single stock options and ETF options were more active.

1.  BAC – BAC has started the year on a tear, up more than 5% since the Dec 31st close.  Over 500k calls traded on Friday (3x the 1 month average), with the Jan18th 16 calls trading over 50k, at an average price of 0.58.

2.  GM – Stock had its biggest down day on Friday since August 27th after a weaker than expected U.S. sales number.  The important support level on the downside is the 50 day ma around $38.70.  The Jan18th 42 calls traded over 45k, mostly at 0.31.  GM’s high in 2013 was $41.85.

3.  XLF – Jan18th 22 calls traded over 40k, mostly for 0.19 in the morning.  XLF hit its highest level since 2008 on Friday, while implied vol is near 1 year lows, as Dan detailed in Friday’s update post.

4.  EEM – Trader rolled 22,500 of the Jan18th 40 puts (sold to close) down to the Feb 39 puts (bought to open), and paid $0.17 for the privilege.  EEM has not traded below $40 since September.  Dan outlined a potential protection trade on Friday.

5.  TWTR – Call to put ratio closed the day around 2 (compared to 1 month average of 1.2).  The Jan18th 80 calls traded over 35k on the day, at an average price of $2.38, and 30 day implied volatility remained above 100.

6.  UPS – The Jan18th 100 calls traded over 20k at an average price of $4.064, almost all in the morning.  Stocks’ earnings report is in late January.

7.  SLW – Looks like a buyer of 5k x 10k of the Jan15 33/47 1×2 call spread, paying $0.34 for the structure.  SLW last traded above $33 in February 2013.