Too Many Options: DOW, EBAY, EEM, HYG, INTC, SPY

by Dan May 28, 2014 4:14 pm • Commentary

Options volumes picked up a bit today following yesterday’s anemic volumes that very much resembled summer trading.  Here are some options trades and activity that caught our eye on a generally sideways day:

1) SPY- there was a buyer of 45,000 June quarterly 190 puts to open for 2.24, see our Chart of the Day on SPY here:

2) EEM – options very active trading 1.5x average daily volume with puts outnumbering calls more than 3 to 1.  There was one bullish trade that stuck out where a trader sold 15,000 Dec 35 puts and bought the Dec 44/48/52 call butterfly 15k by 30k by 15k paying .30 for the whole package when the stock was 42.90.  On the downside the trader is put the stock at 35, plus losing .30 in premium for the structure. On upside break-even is at 44.30 with max gain of 3.70 at 48 and profits trailing between 48 and 51.70.  On the put side there was lots of spread buying, much of it being shorted dated. In the morning with the stock 42.93, two put spreads were bought,trader paid .25 for 30,000 June 42/40 put spreads (78k ended up trading on the day), and paid .42 for 17,000 July 41.5/39 put spreads (48k ending up trading on the day).  

3) INTC – calls were active, with 24,000 Oct 30 calls bought for .20 when the stock was 26.86, but looks closing, could have been an overwriter closing as the options only have a 15 delta

4) EBAY – continues to trade heavy nearing the prior 2014 lows just below $50. A trader closed a bullish bet selling 8,000 July 50/52.50 call spreads at 1.13

5) DOW – saw some bullish long dated action with heavy options volume, nearly 3.5 average daily volume. The largest trade was a buyer of 10,000 of the Jan16 55/65 call spreads for 2.35 when the stock was 51.38

6) XOP – the Spyder Oil and Gas etf seeing some bearish flow, buyer pays 1.30 for 20,000 July 73/66 put spreads

7) HYG – the iShares high yield bond etf sees some bearish activity with a buyer paying .30 for 10,000 of the Sept 90/88 put spreads