Too Many Options: $BBRY, $C, $FB, $GMCR, $SINA & $TWTR

by Dan February 5, 2014 5:13 pm • Commentary

Below is a list of some of the most interesting single stock options activity from today’s trading session:

1.  TWTR  –  in front of the company’s first quarterly report options activity was fairly brisk with total volume of 421k, which is almost 3x the average daily volume of the last 20 trading days.  Calls out numbered puts at a rate of more than 2 to 1 at 288k to 132k.  The implied move heading into the event was about 15%. With the stock at $66 just prior to the close the at the money weekly straddle was offered at about $10, if you bought that you would have needed a $10 move in either direction or about 15% by Friday’s close to break-even. (stock is currently down about 7 dollars after hours)   The most active strikes today were 44k of the Feb 75 calls, 24k of the Feb 80 weekly calls and 17k of the Feb 90 calls.

2. BBRY – the stock is up 30% ytd and it looks like an investor who had previously sold calls against their long stock came out of the entire position known as a buy-write.  When the stock was 9.65 this morning, a trader sold 1.75 million shares at that price and bought to close 17,500 Feb 9 calls for .86

3. C – has been one of the hardest hit U.S. banks of late, down 10% on the year and about 15% from the highs made a month ago, largely as a result of its perceived exposure to emerging markets.  Traders used today’s stabilization in the stock price to exit some call positions that have a small probability of being in the money on Feb expiration, selling 33k Feb 52.50 calls to close at 4 cents

4. GMCR – after the close the company announced that they were selling a 10% stake to KO at a 6% discount to the closing price.  A trader was playing for near term weakness today and bought the Feb 7th weekly 77/70 put spread for 1.75 to open when the stock was around 81.60.  With the stock up $111 after hours, this was not what the trader intended, unless it was a hedge against long stock.

5. SINA – the Chinese internet company has gotten off to a less than stellar start in 2014, down 23% on the year already, one trader was looking up today as they bought 2500 by 5k of the March 80/90 1×2 call spread for 20 cents.  This might have been a closing trade as their is sufficient open interest to cover the trade.  But I would add that this sort of structure could be a very cheap way to leverage an existing long stock position with the break-even right at the $80 break-even level from mid January and $90 the level where the stock would likely see hefty technical resistance.

6. FB – despite trading in a fairly modest range today, closing down less than 1%, options were very active with total volume almost 1.5x the one month average, possibly due to TWTR’s impending earnings. Calls outnumbered puts nearly 4 to 1 at 427k to 114k.  The most active strikes were 71k of the feb 70 calls, 64k of the Feb 80 calls and 35k of the Feb 75 calls.  The largest block trade was a closing seller of the March 65/75 calls spread 9400x at 1.84 vs buying stock 263k shares for 62.35