Too Many Options: VIX, SPLS, VZ, JPM, TIF

by Enis May 21, 2014 5:42 am • Commentary

Stock volumes picked up yesterday on the move lower (though options volume still subdued).  The S&P 500 index remained above its 50 day moving average, which is now around 1868.

1.  VIX – VIX expiration for May is this morning at the open, and VIX options were twice as active as usual.  The May 14 puts were the most active line, closing at 0.25, while the June 20 calls also traded over 60k.  VIX spot remains below 14 despite the market weakness yesterday, as traders don’t seem interested in buying options in the S&P 500 index ahead of Monday’s Memorial Day holiday.

2.  SPLS – Staples reported a weak earnings result, and the stock fell 12.5% to its lowest level since early April.  The 5 year low for SPLS is $10.57 from August 2012.  The June 12 calls traded over 20k at an average price of 0.31 throughout the session.

3.  VZ – Seller of 13k of the June 50 calls at 0.25 in the afternoon.  VZ traded above $49 this week for the first time since early January, but closed 1% lower on the session, and is still negative year-to-date after closing 2013 at $49.14.

4.  JPM – JPM hit a 6 month low on Friday around $53, but has bounced a bit this week.  The July 55 calls traded nearly 15k at an average price of 0.79.  JPM reports earnings prior to July expiration.

5.  TIF – Reports earnings today before the open.  The May23rd 90 / 93 1×2 call spread traded 5k x 10k for 0.40 midday.  TIF’s high of the year (and all-time high) is $94.88 from March.  The implied move is around 5%, while the stock has averaged a 3.5% move over the past 4 quarters.