New all-time high in the S&P 500, so no surprise that calls were much more active than puts across single stocks. Volumes were not unusually high, but here were the standouts:
1. KMI – Dan wrote a CotD post about the call spread trade in KMI yesterday:
Earlier today there was a fairly large out of the money call spread (bought to open) in pipeline company Kinder Morgan (KMI), where a trader bought 40,000 of the Jan 42.50/47.50 call spreads for .25 (bought the 42.5c for .28 and sold the 47.50 calls at .03) when the stock was $34.75, with a break-even at 42.75, up 23%. The trade risks $1 million in premium to make $19 million if the stock is $47.50 or higher.
KMI has not traded above $42.50 in its short 3+ year history. The stock is currently down 2.5% so far in 2014.
2. VZ – Second day this week that there was a large seller of the Jan16 33 puts, as someone sold 50k yesterday at 0.58 (20k traded on Monday at 0.62). That is not much premium for a 1.5 year to maturity trade, but someone with a large balance sheet seems happy to house that extra premium in the meantime. VZ closed just above its unchanged mark on the year yesterday (which is 49.14).
3. SMH – Seller of 37k of the Aug 50 calls at an average price of 0.755 in the morning. The semiconductor index recently hit its highest level since 2001. Meanwhile, SMH implied volatility is at a 2 year low.
4. F – The Jan15 17 calls traded 30k at 0.84 in the morning. F underperformed the broader market yesterday, and found resistance last week at the $17 level, which it has not cleanly breached since October.
5. CCE – Call options were very very active, as takeout speculation spread to Coca-Cola Enterprises (see our NTT post on KO from yesterday). Buyer of 21,500 of the Jan15 55 calls for 0.50 just before the closing bell. CCE’s all-time high of $48.04 from March 2014 is the resistance spot to watch, though $55 is still more than 10% above that level.