Too Many Options: VIX, EBAY, CBS, NOK, ARCP, BTU

by Enis May 22, 2014 5:54 am • Commentary

The VIX closed at its lowest level since August, and below 12 for only the 3rd time in the past year.  VIX calls were very active after about 40% of open interest expired on Wednesday morning.

1.  VIX – Seller of 150k of the Sept 19 / 28 call spread at 0.85.  The July 20 calls and the June 14 calls were the next most active lines, trading over 90k each on the day.  Over 1 million VIX calls traded in total.

2.  EBAY – After a large gap lower following EBAY’s announcement of a security breach, the stock inched higher throughout the day, closing at its high.  EBAY has traded in the $50 to $52.50 range for most of the time since its earnings gap lower on April 30th. 25k of the July 52.5 calls traded at 1.50 in the morning.

3.  CBS – CBS rallied 3% on Wednesday to close at its highest level in a month.  Call volume was very active last week, and picked up again yesterday.  Buyer of 25k of the June 55 calls for 3.45 in the morning.  Separately, a trader sold 15k of the Sept 52.5 puts to buy 15k of the Sept 62.5 / 70 calls for around a 0.10 credit.  Our detailed thoughts on CBS are in a Name That Trade post from last week.

4.  NOK – Buyer of over 50k of the July 8 calls for 0.16 in the afternoon.  NOK’s high in 2014 is $8.20 from early January.  The stock has not traded above $8.20 since early 2011.  Stock is indicated almost 3% higher in the pre-market this morning.

5.  ARCP – Buyer of 40k of the Jan15 12.5 calls for 0.69 near the close.  ARCP did a secondary offering at $12 yesterday, and also announced a sale of its shopping center portfolio to Blackstone for nearly $2 billion in order to buy 500 Red Lobster locations.  ARCP is a one of the few REITs that is currently negative in 2014, and actually neared an 18 month low on yesterday’s selling.

6.  BTU – Trader rolled 32,500 of the June 20 calls out to the Sept 20 calls, paying 0.56 for the privilege.  BTU last traded above $20 in November.  The company’s next earnings report is in late July.