Too Many Options: $VIX, $SPY, $C, $MSFT, $XLF, $GDX, $HAL

by Enis January 27, 2014 7:14 am • Commentary

Options volumes on Friday were dominated by macro ETFs, as markets have started to move together to start 2014 (see our Macro Wrap on Friday about the return of Risk-On / Risk-Off).

1.  VIX – VIX reached its highest level since early October in a large one day move, up 4.37 points to 18.14 (largest since February 2013).  Options volumes were about 3x the one-month average.  Someone sold 100k Feb 20/28 call spreads to close, and sold 70k April 13/14 put spreads to open and bought 70k April 20 calls, did all that for .975, essentially rolling their VIX protection from Feb out to April.

2.  SPY – Options volumes were more than 2.5x the one-month average.  The Jan31st 179.50 puts were the most active line, trading over 100k at an average price of $1.10.  SPY broke its 50 day ma for the first time since October.  The FOMC release on Wednesday is the main macro event this week.

3.  XLF – Trader bought 24,500 XLF Sept 15/18 put spreads for .22.  XLF has not traded below $18 since April 2013, and it has not traded at $15 since August 2012.  The ETF broke its 50 day moving average for the first time since early October.

4.  C – One of the few single names that saw robust options activity.  C fell below its 200 day moving average for the first time since September 2012, quite a run for the stock.  Buyer of 20k of the Feb 52.5/55 call spread for $0.21 in the morning.  The $50-$51 area is now important resistance after Friday’s break.

5.  MSFT – 3x normal options volume as the stock moved 2% higher after its earnings report, though the stock was unable to close above its declining 50 day moving average around $37.10.  The Feb22nd 32 puts were actually the most active line, trading over 30k for an average of $0.10.

6.  GDX – The March 25 calls traded over 20k at an average price of $0.95.  GDX last traded above $25 in late October.  The ETF is trading 12% higher on the year, though still only $8 above its 10 year low from October 2008.

7.  HAL – Stock broke to a new 3 month low on Friday, though still above its 200 day moving average around $47.35.  Buyer of 7500 of the Feb22nd 47 puts for $0.49 in the afternoon.