Too Many Options: $TWTR, $MO, $ABX, $YHOO, $XLE, $NE, $JD, $PPL, $BRCM, $AMAT

by Enis June 13, 2014 6:07 am • Commentary

Stock volumes picked up on the largest down day in 3 weeks.  Options volumes were much higher than the average over the past month as well, especially in the energy sector, which rallied to a new high on the move higher in crude oil.

1.  TWTR – The Sept 50 calls traded over 60k on the day, mostly buyer initiated.  Average price was 0.87.  We closed out the TWTR calendar for a gain and initiated a new trade in the stock yesterday.  TWTR reached its 50 day ma yesterday for the first time since February.  TWTR’s next earnings report is slated for mid-August.

2.  MO – Large call seller to open.  45,000 of the Sept 43 calls are sold to open at .55 when the stock was 41.65, likely an overwrite.  MO had its largest decline of the past 4 months yesterday, though the stock is still up 7.5% year-to-date.  

3.  ABX – Precious metals miners had a strong session yesterday, and ABX was nearly 2% higher.  Buyer of 18,500 of the Jan15 22 calls for 0.38 to open.  ABX last traded above $22 in April 2013.

4.  YHOO – Several buys of 10,000 of the June 35 calls throughout the day, generally trading around $1.80.  Over 30k traded on the day vs open interest of 22,000 so clearly some opening.  YHOO reached a one month high, and $37 is an important resistance level to watch in the name.

5.  XLE – Huge put volumes, trading over 200k puts in total, almost all in July, vs. average volume of 17k over the past month.  The Jul19th 95/90 put spread traded 45k times for 0.65, the Jul19th 95/93 put spread traded 35k for 0.45, both look like the trader rolling long puts higher to improve the protection.  XLE closed at a new all-time high.

6.  NE – Noble hit its highest level since January amidst strength in the drillers.  One trader used the strength to roll June 32 calls out to the Sept 32 calls at $0.95, 40k times.  NE reports earnings in late July.

7.  JD – The Chinese direct sales company has rallied nearly 50% from its IPO price in late May.  The Jul19th 21 puts traded over 40k at an average price of 0.14.  $21 is more than 20% lower than the stock’s $27.17 close.

8.  PPL – Seller of 35k of the Jul19th 34 calls at 0.25 in the morning, all opening.  PPL is up 11.4% on the year, though has declined in the past week along with the utility sector overall.

9.  BRCM – BRCM continued its strong run, rising to its highest level since early 2012.  Seller of 30k of the Aug 41 calls at 0.58 in the morning, all opening.  BRCM last traded above $41 in February 2011.

10.  AMAT – The Jul19th 23 calls traded 30k times for 0.42 in the morning.  AMAT has not traded above $23 since early 2004.