In a day that saw generally risk off activity, there was some interesting options activity that suggested some market participants were closing bearish bets or monetizing hedges in ETFs and Index options that dominated most of the flow:
1. VIX – Six of the most active strikes were in March where it appeared there was a seller in the morning of 120,000 March 16 calls, a total of 175,000 traded on the day, many of them on the bid indicating a seller. While total volume across all strikes was just a bit higher than the average over the last month, call volume outnumbered puts at almost 3 to 1.
2. RSX – while Russian equities bore the brunt of the worst selling in Europe and Asia, there appeared to be profit taking in the options of the Market Vextors Russia etf. Options volume and open interest exploded in the etf, trading a total of 166,000 options compared to the 5,000 or so that have traded on average per day over the last month. Shortly after 10am there was a flurry of selling, with 10k of the March 21 puts sold to close at .40, then a seller of 5,000 of the March 21 puts at .425 to close, and also a seller of 3200 of the May 26 puts at 3.60 to close. The most active strike was 48,000 of the March 21 puts, in one instance a buyer paying .40 for 9500 to open when the etf was 22.68.
3. EEM – just around 10am there was some put selling in the emerging market etf. In one instance a trader sold 61,000 March 38 puts at .55 to close vs selling 2.1 million shares of stock at 38.82. Around the same time there was a seller of 10,000 April 35 puts at .37 to close and a seller of 5,000 April 35 puts at .35 to close. Options volume was basically in line with the one month average of of about 480,000 options traded, but puts outnumbered calls at almost 5 to 1.
4. FXI – shortly before the close there was a seller of 30,000 of the March 36 calls at .34 to close.
5. XLF – options volume ran about 1.5 to 1 vs average daily volume with puts outnumber calls 2 to 1. There was a buyer of 45,000 Jan15 18 puts for .48 vs buying 810,000 shares of stock on an 18 delta for 21.55. The second largest block on the day was also a buy of puts where a buyer paid .23 for 22,500 of the March 28th weekly 21 puts to open when the stock was 21.49
6. XLK – on the bell there was a buyer of 77,000 of the March 37 calls to open for .10, the break-even on this trade is up about 3.3% at 37.10.
7. PFE – a massive trade went up right before the close where a buyer paid 1.57 for 100,000 Sept 32 calls to open. With the stock at 10 year highs, the buyer is obviously eyeing a breakout, with little overhead resistance above on the charts to about $40.