Too Many Options: $EEM, $FXI, $AA, $DAL, $BIDU, $MSFT, $MCD

by Enis July 23, 2014 6:08 am • Commentary

Options volumes shifted to emerging markets and commodities on Tuesday, as single stock options were more subdued.  EEM had its highest close in more than a year, and FXI had its highest close since December.

1.  EEM – $45 is the critical level to watch after yesterday’s rally.  EEM has not been convincingly above $45 since August 2011.  The Oct 42 puts traded 130k for 0.54 in the afternoon.  EEM last traded below 42 in mid-May.

2.  FXI – Options traded more than 3x the one month average.  A three way trade in September was the standout – looks like the trader sold 25k of the Sept 37 puts at 0.378 to buy 25k of the Sept 39.5/41 call spread for 0.52, paying 0.142 for the package.  FXI’s 1 year high is $40.32 from December.

3.  AA – Someone rolled up the Jan15 17 calls to the Jan15 18 calls, collecting 0.36 for selling the Jan15 17/18 call spared around 22k times in the morning.  AA is now up 61% year-to-date, an impressive run for the stock.  Its 5 year high is $18.47 from April 2011.

4.  DAL – Buyer of 20k of the Dec 42 / 50 calls for 1.44 to open.  DAL’s high of the year is $42.66 from early June.  The stock is still up 37% year-to-date even with the recent pullback.  DAL reports earnings this morning before the open.

5.  BIDU – BIDU touched $200 for the first time in its history.  A trader sold 8,000 of the Aug 200 calls to close,and bought 16,000 of the Aug 220 calls to open, collecting $3.275 for the roll.  BIDU reports Thursday after the close.  The implied move is about 6%, and the stock has moved on avg about 5% over the last 4 qtrs.

6.  MSFT – Big roll in MSFT calls – a trader sells 70k of the Aug 45 calls at 1.18 to close, and buys 70k of the Aug 47 calls for .51 to open.  MSFT is currently trading up 1.5% in the pre-market after yesterday’s results, which were decent with the exception of Nokia.  

7.  MCD – Stock touched its lowest level since March after weaker-than-expected earnings results.  Buyer of 16k of the Sept 105 calls for 0.13 in the morning, likely to close.  MCD is now down 1% year-to-date.