Too Many Options: TWTR, T, CRM, AIG, SCTY, HUN

by Enis May 7, 2014 6:23 am • Commentary

Momentum stocks took a beating once again, led by TWTR, which was the most active stock among single stock options.

1.  TWTR – The options traded more than 5 times average 1 month volume.  Weekly and May17th options were by far the most active, with the weekly 35 calls trading over 20k on the day.  Outside of May, the June21st 30 puts were the most active line, trading nearly 10k at an average price of 1.24.  TWTR 30 day implied volatility closed the day at 64, still in the middle of its 6 month range.

2.  T – Buyer of around 50k of the June21st 35 puts for 0.44 throughout the day.  T is currently up 1% on the year, and $35 is near the unchanged level.  The stock sold off 4% after its April earnings report.  On the downside, the stock’s 2 year low was made in early February, just below $32.

3.  CRM – The May17th 55 calls traded over 22k on the day, mostly buyer initiated, at an average price of $0.73.  CRM reports earnings on May 20th after the close.  The stock closed 2013 right around $55, but is currently down 6% year-to-date.  Dan initiated a new trade yesterday in CRM, posted here.

4.  AIG – Options traded nearly 5 times the average one month volume, as AIG declined 4% after a weak earnings report.  The stock is now down 1% year-to-date.  The Aug 52.5 calls and the Aug 49 puts both traded over 14k, mostly in the morning, and it looks like a trader collaring stock for protection.

5.  SCTY – SolarCity reports earnings after the close today.  Calls were active yesterday ahead of the report, with a buyer of 6k of the May17th 60/65 call spread for 0.77 to open shortly after the open.  Implied move is about 9.5%, vs. SCTY’s historical move of 12% over the last 5 quarters (since its IPO).

6.  HUN – Stock has had a very strong run since October 2011, tripling in the ensuing rally.  Trader rolled 25k of the May17th 21 calls out to the Aug 24 calls, and at the same time bought 20k of the Aug 21 puts for 0.325 to open.  Huntsman’s next earnings report is in late July.