Too Many Options: $FB, $FTNT, $HLF, $MDLZ, $SINA, $ZNGA

by Dan January 16, 2014 4:47 pm • Commentary

1. HLF – I think it is safe to say that the stock had a fairly crappy day, down almost 10% in sympathy with NUS, which at one point today was down 50% from last week’s highs.  A couple traders rolled bullish bets from Jan to Feb with just one day to expiration.  In one instance a trader sold 7,000 Jan 72.50 calls at 1.90 to close and bought 10,000 Feb 77.50 calls for 4.55 to open. Similarly, another trader sold 5,000 Jan 70 calls at 4.10 and bought 10,000 Feb 80 calls for 3.90.  If you missed our rundown on the put activity of the last week please read HERE, the Jan 2015 50 puts have become the largest single line of open interest.

2. MDLZ – earlier this morning a smart operator bought 20,000 Jan 24th (next week expiration) 36 calls for .27 vs selling stock on a 37 delta at 35.60.   While the stock did not close much higher, implied volatility ripped and the calls ended up closing at more than twice what the trader paid.  After asking around on the stock, it appears that shareholder elections for nominees to the board of directors need to be made by Jan 21st.  Why is this important? Well activists are pushing for a sale, and they will need to get representation on the board.  All a little above my pay-grade, but you get the picture, some players think next week could be a catalyst for the stock.

3. FB – trader just bought 15,000 Feb 50 / 45 put spreads paying about .77 to open.  Earnings are confirmed for Jan 29th, the options market is already implying a one day move of about 10%.

4.  SINA – the stock’s 10% decline in the last week has drawn out some bulls as there were 2 decent size call purchases in Feb looking for a near term bounce.  One trader bought 4,700 Feb 90 calls for 2.13 to open and another trade saw a buyer of 1250 of the Feb 7th weekly 81 calls for 3.90.

5. FTNT – a trader bought 30,000 Feb 23/25 call spreads for .44 vs selling about 500,000 shares at 21.16, this trade caught my eye as there has been a good bit of activist interest of late in similarly positioned telecom equipment/security infrastructure stocks like JNPR, RVBD & NTAP.

6. ZNGA -stock was down 12% on cautious comments on the company’s Q4 and future outlook from a brokerage firm.  There was a series of trades where a trader sold the June 3 Put and bought the June 4.5 calls, vs selling stock.  This is a bullish trade.  The company is expected to report Q4 results the first week of February.