Too Many Options: SPY, IWM, QQQ, JCP, CSCO, ZNGA, CBS

by Enis May 16, 2014 7:24 am • Commentary

Put options in the main macro ETFs were quite active, swamping volumes of single name options.  Stock volumes in the market were their highest in the past month, on the largest daily decline for the S&P 500 index in the past month.

1.  SPY – Closed just above the 50 day ma, which is around $186.80.  Options traded more than 1.75x the average volume, with weekly options dominating.  Outside of the May, the Jun21st 185 puts and the Jun21st 184 puts were the most active lines, both trading over 40k on the day.  The 20 day low in SPY $185.

2.  IWM – Options traded nearly 2x daily volume, with puts over 1 million in total.  The weekly 108 puts were the most active line, trading nearly 100k on the day.  Outside of May, the Jun21st 110 puts traded nearly 40k at an average price of 3.70.  The stock bounced yesterday just above the 6 month low from early February, which was $107.27.

3.  QQQ – Puts were twice as active as calls.  The July 75 puts traded 60k in the afternoon, buyer paying 0.225.  QQQ’s 200 day moving average is now around $84, and the stock closed below its 50 day ma around $87.75.  QQQ last traded below $75 in July 2013.

4.  JCP – The weekly 8 puts traded over 35k at an average price of $0.30 throughout the day.  JCP is trading around $10 in the pre-market after a better-than-expected earnings report, up almost 20% from yesterday’s close.  JCP’s 6 month high is $10.30 from November.

5.  CSCO – Stock closed at a 6 month high, holding above the $24 level even on selling over the day.  That is an important support spot going forward.  The July 25 calls were the most active line, trading over 30k at an average price of $0.38.  CSCO has traded above $25 for only a several months over the past 5 years.

6.  ZNGA – Stock down about 40% from its March high, quite a decline in just 2 months.  Bullish structure near noon:  trader sold 10k of the Sept 3 put to buy 10k of the Sept 4.5 call, received 0.05 credit for the package.  ZNGA has not traded below $3 since September.

7.  CBS – Jan15 calls were active for the second time this week.  This time around, the Jan15 60 calls traded nearly 20k at an average price of 4.01, mostly buyer initiating.  CBS is holding above the $55 support level this week, with abnormally heavy volume trading in the past week.