Too Many Options: $BAC, $P, $COH, $ATML, $MBI, $IPG

by Enis June 18, 2014 6:11 am • Commentary

Options volumes were light ahead of today’s FOMC meeting, while implied volatility moved lower.  Call options dominated single stock options, while investors were more focused on put protection in the major indices (OEX index and SPY put/call ratios were around 3, while CBOE single stock equity put/call ratio was 0.49).  

1.  BAC – Financials were the best performing sector, and BAC was a leader of the group.  The Jun21st 15.5 calls traded nearly 50k on the session, at an average price of 0.11, mostly a morning buyer to open.  We laid out a potential trade idea in BAC in last week’s Name That Trade post if the setup presents itself in the coming weeks.

2.  P – Calls traded over 3x the average 1 month volume.  Looks like a trader rolled down from the Sept 35 calls to the Sept 30 calls, buying 8,400 of the Sept 30 calls for 2.15 to open, and selling 21k of the Sept 35 calls at 0.86 to close.  CC posted a Considering Our Options post last week discussing our current Pandora call spread position.

3.  COH – Trader rolled up puts that expire this Friday, selling 7500 June 39 puts at .60 to close, and buying 7500 June 40 puts for 1.00 to open when the stock was 40.40.  This was in anticipation of the stock’s analyst day on Thursday.  COH has declined 27% so far in 2014.  

4.  ATML – Call options active again as ATML hit a new 2 year high.  The Jul19th 10 calls traded nearly 9k on the session, and the Aug 8 calls traded nearly 5k.  30 day implied volatility closed at 45, near 4 month highs.  Dan pointed out the unusual call activity in ATML last week in a Name That Trade post.

5.  MBI – The Nov 15 calls traded nearly 20k on the day an average price of 0.48.  The largest block was a trader selling 7k of the Nov 10 puts at 0.26 to buy 7k of the Nov 15 calls for 0.37 in the morning.  MBI last traded above $15 in March, and its five year high is $16.15 from May 2013.

6.  IPG – Buyer of around 17k of the Jul19th 20 calls for an average price of 0.66, mostly midday.  IPG has not traded above $20 since 2002.  The stock’s next earnings report might be scheduled before July expiration.