Too Many Options: $EBAY, $EEM, $KGC, $TXN & $VWO

by Dan January 23, 2014 4:29 pm • Commentary

Our list of the most interesting untied stock, etf and index options activity on the day:

1.  EBAY – Stock had a wild ride today, closing up a tad after trading up more than 10% in the after hours last night.  Bit of a ying and a yang going on as some investors were disappointed with the worse than expected Q4 results and 2014 guidance, while others seemed to be encouraged by Carl Icahn’s stake and push for corporate action in an effort to unleash shareholder value.  Options traded over 3.5x average daily volume with call sellers dominating the flow.  The largest single block was a seller of 27k Feb 52.50 calls at 3.30, these were tied to stock at 55.35, so could have been a replacement to the calls, and very likely closing a trade entered on Jan 14th where a trader bought 32k Feb 52.50 calls for 2.28 to open (from our Too Many Options post here).    The Feb 55 calls were also very active, with 20k trading, most look to be sold, with 12k sold at 1.68 to close shortly after the open, also tied to stock.

2. EEM – emerging markets got nailed overnight in Asia followed by Brazil’s Bovespa closed down 2%.  Right out of the gate there was a buyer of EEM puts in Feb paying .57 for 55k.  This reverses some of the longer dated bullish flow we saw yesterday in FXI and EEM in May, both seeing out of the money call buying in size.

3.  VWO – keeping with the bearish theme in emerging markets, there were put buyers in the morning of Vanguards em etf, with a block of 7400 Feb 39 puts bought for .80 to open and then right on the close there was a buyer of 18k Feb 39 puts for .95 to open. The 4 largest holding in VWO happen to be Chinese vs the EEM’s largest holding Samsung, followed by TSM and then Chinese stocks.

4. KGC – Gold had one of its best days in a very long time, closing up more than 2% and actually causing some technicians to take notice of what could have been a very nice near term bottom after closing on the lows at the end of 2013.  A trader took a fairly chunky but low premium bet in miner KGC, buying 50k March 5 calls for .20 to open.  The largest line of open interest is the May 6 calls with 91k.

5. TXN – the stock made new 13 year highs yesterday, and one trader rolled up some puts in April, likely a hedge against a long by selling 10k April 42 puts at .87 to close and bought 10k April 45 puts to open.