Too Many Options: $UNG, $CSCO, $C, $RSX, $EWZ, $CVX, $MS

by Dan January 31, 2014 6:51 am • Commentary

Despite the weakness in the broader stock market to start 2014, the CBOE put/call ratio has remained below 1 for every session since October 15th.  That’s the longest such streak since late 2001/2002 (the real record was in 2000, when most of the year was below 1).

1.  UNG – Natural gas has gotten very volatile in the past month as a result of the repeated polar systems bringing frigid weather to much of the country.  10 day realized volatility in UNG hit 104, its highest level since September 2009, and 30 day realized volatility is up to 67.  The Feb 24 puts and the Feb 28 calls both traded around 20k, with the Feb 28 calls seeing a buyer of 10k for 1.22 early in the morning.

2.  CSCO – Trader was collaring stock in the afternoon, with the largest single prints:  bought 17,482 of the Mar 21 puts for $0.58 and sold 12,916 of the Mar 23 calls at $0.40.  The puts traded a total of 42k on the day, and the calls traded about 29k.  CSCO reports earnings on February 12th, and $23 is its high so far in 2014.

3.  C – Trader playing for long-term upside, selling 10k of the Jan15 40 puts, and buying 10k of the Jan15 50/62.5 call spreads, paying 1.65 for the package.  C struggled to bounce this week after breaking its 200 day ma last week, and volume has picked up below $50 as well.  The stock last traded below $40 in in the first week of January, 2013.

4.  RSX – Russian equities, bonds, and the currency have all come under pressure in the past couple weeks as investors reprice emerging market assets.  RSX, the Russian equity ETF, hit its lowest level since July this week, and is only 10% above its 4 year low of $23.12 seen in June 2012.  Buyer of 22k of the March 23 puts for 0.30 in the morning.

5.  EWZ – The Brazilian ETF hit a new 4.5 year low this week, breaking the $40 level for the first time since mid-2009.  A few large put trades, with one trader buying 15k of the Feb22nd 35.50 puts for 0.135, and another buying 6k of the March 35 puts for 0.36.

6.  CVX – Stock has held the $115 support level in the past week, and reports earnings this morning before the open.  Someone bought 10k of the Feb22nd 120/125 call spread for $0.49.

7.  MS – Stock has battled the $30 level all week, and closed right around there yesterday.  Someone bought 7k of the Jan15 17 puts for 0.25.  MS has not traded below 17 since December 2012.