Too Many Options: $OXY, $COH, $GILD, $YHOO, $FCX

by Enis July 3, 2014 6:17 am • Commentary

One of the lightest volume days of the year ahead of the July 4th holiday tomorrow.  The ECB rate release is at 7:45 am EDT today, with Draghi speaking at 8:30 am.  The payrolls report in the U.S. also comes out at 8:30 am.

1.  OXY – An options trader closed a bullish bet, selling 30,000 of the Aug 105 calls at 1.84.  These calls were originally bought back in late April for 1.43, as detailed in our TMO post.  The total open interest in this line was 60k before yesterday’s sale of 30k calls.  OXY hit a 2 year high of $105.64 in late June.  $100 is important psychological support.

2.  COH – Over 25k of the Jul19th 36 calls traded for an average price of 0.42 throughout the day, mostly buyer initiated.  COH filed a restructure plan after the close detailing its restructuring charges for updating stores, closing stores, and inventory adjustments.  The stock is down 37.5% year-to-date.

3.  GILD – GILD broke out to a new all-time high this week.  Trader rolled up a call position, selling 7,700 of the Aug 80 calls at 8.00 to buy 7,700 of the Aug 87.5 calls for 3.20, collecting 4.80 for the roll.  GILD reports earnings in late July.  The stock is up 16% so far year-to-date.

4.  YHOO – The Aug 36 puts traded 22,500 for 2.19 near the close.  The Alibaba IPO is expected to be on August 8th, though no confirmation yet from the company.  Implied volatility in YHOO is highest in August, indicating that the options market expects similar timing.  YHOO reports earnings on July 15th.

5.  FCX – FCX neared a breakout to a 1 year high on heavy volume.  We detailed the overall setup in a CotD post.  Buyer of the Sept 40 calls 12,800 times for 0.61 in the afternoon, playing for a breakout over the next couple of months.  FCX reports earnings on July 23rd.