Too Many Options: $IGT, $S, $SOCL, $FTNT, $ECA, $YNDX

by Enis July 9, 2014 6:25 am • Commentary

Second largest down day in the indices in the past month, ahead of the FOMC minutes this afternoon.  Options volumes were concentrated in a few names.

1.  IGT – Seller of over 100k of the Aug 13 puts at 0.20 to open, unusually high volume for IGT, which averages about 20% of that in a normal session.  IGT, which manufactures computerized casino gaming systems, rallied from near $12 to around $16 in early June as a result of GTECH’s expression of interest in exploring a possible transaction with IGT.  The stock’s 30 day implied volatility is around 60 as options traders are anticipating more headlines around a potential acquisition.

2.  S – The stock closed just above its 200 day moving average around $8.30.  Seller of 40k of the Jul19th 8 calls at 0.43 to buy 60k of the Aug 9 calls for 0.27.  S has not been able to trade above $10 since early January.

3.  SOCL – The very small cap social media etf with largest holdings of Tencent in Hong Kong (11.6%), FB (10.4%) and LNKD (9.3%sees some opening put activity – trader pays .80 for 4,000 Aug 19 puts when etf was 19.18.  The etf declined more than 4% for the first time since April 25th.  

4.  FTNT – Buyer of 20k of the Jul19th 24 calls for 0.45 in the morning.  FTNT was down 4.5% yesterday on its highest volume since late April.  The call buyer sent 30 day implied volatility around 7 points higher.  FTNT is a network security stock that is up 25% year-to-date.

5.  ECA – Three way trade – The Jul19th 21 calls traded 10k at 1.15, the Jul19th 22 calls traded 12,500 at 0.45, and the Jan15 23 calls traded 22,500 for 1.50, looks like a trader rolling calls out and up.  ECA is up 25% year-to-date, and its $24.83 high from late June was the stock’s highest level since the fall of 2011.

6.  YNDX – The stock sold off 6% on its highest volume since late April, another of the growth stock victims yesterday.  The Aug 30 puts traded over 20k at an average price of 1.59, mainly one large buyer int he afternoon.  YNDX last traded below $30 in mid-May.  The next earnings report is in late July.