The energy sector was the most active for the second straight day, as XLE bounced back after its heavy selling on Tuesday. Outside of energy, options volumes were lighter than the average over the past month.
1. FB – FB closed at its highest level since mid-March, approaching its all-time high of $72.59. Interesting closing trade in the afternoon – a trader sold the Jul19th 65/
2. XLE – Activity was focused in September puts again (similar to Tuesday’s XLE options volumes). Buyer of 31k of the Sept 95 puts for 1.42 to sell 41k of the Sept 90 puts at 0.61, looks like a trader rolling up protection. XLE implied volatility is still in the low teens despite the spin in realized volatility this week.
3. SMH – Buyer of 20k of the Aug 48/45 put spread for 0.61 to open. SMH has risen more than 20% from its early February low as the chip sector has been one of the best performers in 2014.
4. PBR – Petrobras has been unable to break above the $16 resistance level over the past 2 months, and the stock declined 1.5% yesterday. Seller of 31k of the Jul19th 18 calls at 0.02 midday, likely to close.
5. RIG – Seller of 18k of the Jan16 30 puts at an average price of 1.05 in the morning. This is the same seller who sold 11k of this line at 1.06 on Monday, as posted in Tuesday’s TMO. RIG last traded below $30 in late 2003.
6. VLO – Stock declined to its lowest level since early March on the largest volume day for VLO since mid-2009. The catalyst was news from the U.S. Commerce Department that it will allow a wider definition of oil products to be exported from the U.S., which is likely to increase the costs for refiners, especially in Texas, as oil producers export more domestic petroleum products abroad. 30 day implied vol increased about 6 points on the news. Calls were much more active than puts, and the Aug 55 calls traded over 16k at an average price of 1.21.
7. BUD – BUD hit a new all-time high last week, and the shares are up 8.5% so far in 2014. There was a bullish roll where a trader sold 2500 of the Sept 115 calls at 4.