Too Many Options: EEM, IYR, ACAS, WMB, PBR

by Enis May 14, 2014 6:20 am • Commentary

ETFs much more active than single stocks once again.  EEM was particularly active, as the emerging market ETF closed at its highest level since mid-November.

1.  EEM – Calls traded more than 3x the average volume, while puts traded about 1.7x the average.  The June 39 puts traded over 80k, while the Sept upside calls were active (the Sept 43.5, 44.5, and 45.5 calls all traded over 50k).  EEM has found resistance near $45 on several occasions since the ETF broke below that level in August 2011.

2.  IYR – Buyer of 60k of the May30th 70.5/69 put spread for 0.35 to open.  IYR reversed hard yesterday after hitting a new high for the year.  The REITs have been one of the best performing sectors in 2014, with IYR up more than 12% year-to-date.

3.  ACAS – Seller of 24k of the Nov 13 puts at 0.36 to buy 12k of the Nov 16 / 19 call spread for $0.75, almost no premium structure altogether.  ACAS is an alternative asset manager that has stagnated over the past year, but remains in a long-term uptrend from the 2009 lows.  Now a $4 billion market cap.

4.  WMB – Call options very active, more than 5x average volume, after positive projections for cash distribution in a company press release, and ahead of the company’s analyst day today.  The weekly 44 calls were the most active line, trading over 17k on the session.  WMB hit a new all-time high this week.

5.  PBR – Petrobras has rallied 50% since its March low, reaching its highest level of 2014 last week.  Calls active in the morning, with the Jul 14 / Oct 15 call diagonal trading 15k for a 0.32 credit.  PBR has been in a very long-term downtrend, down from a high of $53.46 in December 2009.

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