Too Many Options: $TWTR, $AAPL, $YHOO, $MRO, $ASH

by Enis June 27, 2014 5:56 am • Commentary

The tech sector dominated the single stock options volume yesterday.  TWTR was the major standout, breaking above the $40 level for the first time since April.

1.  TWTR – Calls traded 3x the average one month volume as the stock hit its highest level since late April.  The Sept 50 calls were bought aggressively on June 12th, as we noted in a TMO post:

The Sept 50 calls traded over 60k on the day, mostly buyer initiated.  Average price was 0.87.

The line traded 60k for 1.55 and 20k for 1.60 in the afternoon yesterday, looks like more buying as they traded on the ask.  TWTR has rallied from around $30 in May after the lockup expiry.  We currently own the Sept 40/50 call spread, detailed here.

***CORRECTION*** The Sept 50 Calls were sold to close (for nearly a double) based on open interest decline.

2.  AAPL – While most of the volume was in weekly options as usual, there was a buyer of 14k x 28k of the Jul25th 92/96 1×2 call spread for 0.46 to open.  AAPL is expected to report earnings on the week of Jul25th expiration, so the 1×2 call spread, which will be profitable between 92.46 and 99.54, will catch the earnings event.  AAPL’s high of the year is $95.05, and its all-time high is $100.725.

3.  YHOO – Buyer of 26,635 of the Jan15 45 calls for 0.74, and a buyer of 15k of the Jan15 50 calls for 0.37.  YHOO bounced from a 2 month low yesterday, but is still down 17% so far in 2014.  Dan discussed many of the struggles at Yahoo in Wednesday’s MorningWord post.

4.  MRO – Marathon broke out to a new 5 year high in June, and is flirting with a break above the all-time high of $40.70 from June 2007.  Buyer of 15k of the Jul19th 39 puts for around 0.47 to open in the afternoon.  MRO does not report earnings until early August.

5.  ASH – Large bullish roll up and out in ASH when stock was $107.44.  A trader sells to close 12,000 of the July 105 calls at 3.20 to close and buys 19,000 of the Oct 110 calls for 3.90 to open.  Stock hit a new all-time high this week, and is already up 11.5% in 2014.