Too Many Options: $EEM, $DIS, $KORS, $ADSK, $INTC

by Enis July 16, 2014 6:07 am • Commentary

Financials were the best performing sector yesterday after two strong earnings reports from JPM and GS.  IWM continues to underperform SPY and QQQ.  Options volumes were higher yesterday compared to the past couple of weeks.

1.  EEM – Buyer of 200k of the Oct 40/37 put spread for 0.25 to open.  EEM is up 5% year-to-date, and touched its highest level since early 2013 yesterday.  EEM last traded below $40 in March, and its 52 week low is $37.05.  On the upside, $45 is a crucial resistance level that has held since August 2011.

2.  DIS – Dan and CC laid out the details of the DIS options trade in yesterday’s NTT post:

This morning when the stock was $86 an investor sold 50,000 of the Jan15 95 calls at 1.44 to close.  What’s interesting about this is that these calls were bought to open about 40 days ago (on June 4th) for 1.66 when the stock was $84.  We obviously have no idea what the intent of this investor was, but I think it is a safe bet that they expected the stock to go higher.

DIS reports fiscal Q3 earnings on August 5th.

3.  KORS – KORS is another stock that we discussed in a post on the site on Monday.  The stock broke its 200 day moving average on Tuesday for the first time since its IPO in December 2011.  The 7% decline is an indication of the significance of technical levels for long-term trend followers, many who have likely been in the stock for years.  The Jul19th 80 puts traded over 30k on the session at an average price of 0.89, mostly opening given the prior open interest of just 3k.  The next earnings report is also on August 5th.

4.  ADSK – ADSK continues to flirt with $55 support.  We put on a trade in the name last week.  On Tuesday, there was a buyer of 16k of the Aug 60 calls for 0.73 to open, at the same time that there was a sell of 5k of the Jul19th 55 calls at 0.92.  Looks like a partial roll of the call position, but adding a good bit of new premium to buy more Aug 60 calls.  ADSK is expected to report in late August.

5.  INTC – The stock is currently trading 5% higher in the pre-market after guiding higher and increasing its buyback.  Options traded nearly 5x the average 1 month volume yesterday, with the Jul19th 32 and 31 calls the most active lines.  INTC has not traded above $35 since early 2002.