Too Many Options: $VIX, $FB, $AMAT, $EA, $BEAV

by Enis July 10, 2014 6:22 am • Commentary

Options activity was concentrated in technology stocks and the macro ETFs and indices.  Volatility is starting to pick up in the indices, so macro instruments are likely to become more popular.

1.  VIX – Relatively light volume in VIX options except for one very large buyer of the Sept 17 calls, paying 0.84 for around 85k in the morning.  We currently own a long position in Sept VIX futures, detailed here.  VIX spot has not touched 13 for nearly 2 months.

2.  FB – Calls traded about 1.5x the average daily volume over the past month.  The Jul19th 65 calls were the most active line, trading over 35k at an average price of 1.09.  FB reports earnings on July 23.  The stock’s 200 day moving average is $58, while its all-time high is $72.59 from March.

3.  AMAT – AMAT has seen its share of bullish call activity of late.  A buyer paid 0.67 for 7300 of the Jan15 27 calls to open – that could have been a roll as close to 8,000 of the Jan15 24 calls look to be sold between 1.49 and 1.57 to close.  AMAT last traded above $27 in early 2002.  The next earnings report is in mid-August.

4.  EA – EA saw some bullish activity.  A buyer pays 1.00 for 5,000 of the Sept 37/41 call spreads to open when the stock was 35.42.  The stock last traded traded above $37 in September 2008.  EA is already up 55% year-to-date.  The company reports earnings on July 22nd.

5.  BEAV – Trader sells 14k of the Jul 19th 95 calls at 0.55 to close vs. buying 14k of the Aug 100 calls for 1.00 to open.  BEAV has consolidated between $90 and $100 since its early May announcement that it had hired advisers to study a sale or sin off of some businesses.  This trader is likely anticipating an announcement before August expiration.  The next earnings date is July 23.