Too Many Options: $VIX, $GDX, $NKE, $DAL, $MU, $SWY, $PLUG

by Enis March 10, 2014 8:00 am • Commentary

Relatively light volumes for a payroll Friday, with VIX calls the most active options on the board.

1.  VIX – Buyer of 60k of the March 17/20 call spread for $0.30 in the afternoon.  VIX ended a touch higher on the week even with the SPX higher by 1%.  VIX spot was last above 17 in early February.  March VIX options expire on the morning of March 18th.  We still own this VIX structure.

2.  GDX –  Seller of 25k of the Mar 27 calls at 0.41 to close around 11 am.  GDX’s high so far in 2014 is 26.955, and the trader likely decided to salvage the premium on the March 27 calls when GDX was unable to punch to a new high last week.  200 day ma around $25 is first support.

3.  NKE – Dan mentioned the following trade on QuickHits on Friday:  NKE saw a bullish roll – trader sold 5,000 March 14th, next week 78 calls to close, and bought 6,000 March 22nd 80/85 call spreads, which will catch their fiscal Q3 earnings on March 20th.  NKE’s all-time high is $80.26 from December 9th.

4.  DAL – Stock was up 6% last week to another new all-time high (since coming out of bankruptcy in 2007).  Trader sold 10k of the Sept 30 puts and bought 10k of the Sept 36/43 call spreads, paid .55 for the structure.  DAL is already up 29% so far in 2014.

5.  MU – Buyer of 20k of the Apr19th 24/22 put spread for 0.72 in the afternoon.  MU closed 2013 at 21.75, and has traded above that level for most of 2014.  Earnings are in late March.

6.  SWY – The Apr 40 calls traded over 25k at an average price of 0.27, and the Apr 38 puts traded over 10k at an average price of 0.43, as options traders positioned for more news flow around the Cerberus acquisition of Safeway, which was first rumored in February.  The merger is expected to close in late 2014.

7.  PLUG – The stock is up 435% in 2014 alone.  In fact, PLUG was trading around $0.20 a year ago.  The Mar 7 and Mar 8 calls were the most active lines, as PLUG was up another 30% on Friday.  Options volumes were almost 10x the 1 month average daily volume.