Too Many Options: $AAPL, $XLE, $BBRY, $ACI, $FCX

by Enis July 8, 2014 6:34 am • Commentary

The CBOE composite put/call ratio closed above 1 yesterday for the first time since May 15th.  Granted, overall volumes were light, but call activity was more subdued than it has been for much of the past two months.

1.  AAPL – AAPL hit a new 52 week high, moving above the $95 level yesterday.  The company reports earnings after the close on July 22nd, and call options activity has been active ahead of that event.  Calls traded nearly 3x more volume than puts yesterday.   The weekly 95 calls were the most active line, trading over 60k at an average price of 0.89.  The Jan15 100 calls traded over 50k at an average price of $4.53.  Also, Dan noted in QuickHits that the Jul19th 95.71 / 97.86 1×2 call spread traded 5k by 10k,looks closing on the 95.71 and opening on the 97.86, as a trader rolls up a long call position.

2.  XLE – The Sept 98 puts traded 28k for 2.18 and the Sept 95 puts traded 50k at 1.22, looks like a trader rolling up put protection in Sept in XLE, buying the 98 puts and selling the 95 puts.  $95 is the first level of support for XLE on the downside, before the long-term breakout area around $91.

3.  BBRY – The stock hit its highest level since Sept 2013, and is now up 51% year-to-date.  Calls traded more than 2x the average daily volume over the past month.  Buyer of 20k of the Sept 10 calls for 1.62 in the morning.  Implied volatility was up nearly 5 points on that line as options buyers dominated volumes.  BBRY’s 52 week high is $12.18 from August 2013.

4.  ACI – Arch Coal was down 6% on heavy selling on Monday (the 10 year low is $3.15 from early June).  The entire coal sector was hit after Deutsche Bank downgraded BTU.  Buyer of 30k of the Oct 3.5 puts for 0.43 in ACI, vs. selling 20k of the Oct 5 calls at 0.05, calls are to close.  ACI is down 24% year-to-date.

5.  FCX – FCX rallied for the 6th straight day, holding its breakout above the $38 level.  Buyer of 3500 of the Sept 39 calls for 1.46 in the afternoon, a continuation of the buying in the morning.  A total of 11,540 traded on the session at an average price of $1.42.