Too Many Options: $SPLS, $WAG, $RIO, $PBR, $TLM, $AAPL

by Enis July 24, 2014 5:58 am • Commentary

CBOE composite put/call ratio closed at its lowest level in a month, at 0.75.  Aside from the usual technology names, some retail and commodity stocks had unusual options activity.

1.  SPLS – Buyer of 10k of the Jan15 13 calls for 0.30.  SPLS has held just above its 10 year low of 10.57 over the past month.  The stock last traded above $13 in mid-May before earnings.  We have a position on in SPLS that we laid out a month ago.  The company is expected to report earnings in late August.

2.  WAG – Large roll in WAG calls.  Trader sold 27,000 of the Aug 85 calls at .15 to close, and bought 27,000 Aug 80 calls for .60 to open, when the stock was 72.68.  WAG’s all-time high is from June 19, hitting $76.39 intraday.  The stock is currently up 27% year-to-date.  

3.  RIO – RIO has shown some strength along with commodity stocks and emerging markets in the past month.  The stock is approaching its 2 year resistance level of $60.  There was a buyer of 10,000 Aug 55/57.50 put spreads for $1.00, looks like rolling from the 55 strike up to the 57.50 strike.  RIO reports earnings on Aug 7.  The stock is up 2.7% year-to-date.

4.  PBR – Seller of 24,400 of the Sept 18 calls at 0.89.  PBR has not traded above $18 since May 2013.  The company reports earnings on August 8th.  The stock has staged a huge rally since mid-March, and is now up 24.5% year-to-date.

5.  TLM – Call options very active after TLM disclosed that Repsol has expressed interest in “various transactions” with Talisman.  The Aug16th 11 calls traded over 20k at an average price of 0.44, and the Oct and Sept 12 calls both traded over 10k as well.  Analysts are not sure whether that implies a full takeover bid, or simply purchases of parts of the company.  Stock closed at its highest level since January.

6.  AAPL – AAPL closed at its highest level since Sept 2012.  Options traded more than 2x average volume.  Outside of weekly options, the Sept 105 calls were the most active line, trading over 50k at an average price of 0.80 on the session.