Too Many Options: $FB, $IP, $FOXA, $AVP, $BA

by Enis July 25, 2014 7:08 am • Commentary

The market is on track for one of its lowest volume weeks outside of a holiday-shortened  week in the past few years.  Options volume yesterday was relatively light as well.

1.  FB – FB hit a new all-time high, and options traded 3 times their average daily volume.  The weekly 76 calls and weekly 75 calls were the most active lines.  Outside of the weekly calls, the Aug16th 75 calls and Aug16th 75 puts both traded over 20k on the session.  FB’s intraday high was $76.74, and the spot to watch on the downside is its March high of $72.59.

2.  IP – Buyer of 21k of the Jan15 52.5 calls for 1.24 in the morning.  Bloomberg obtained a July letter from the hedge fund Perry Capital which indicated that paper and packaging companies like IP, RKT, and KS should be MLP-eligible, which would be a huge boost for tax savings for investors in those companies.  The options buyer made the purchase in the morning before the stock really got going (IP closed up 5.5%), and the Jan15 52.5 call line closed at $2.10.  IP closed at its highest level since the year 2000.  The stock’s all-time high is $60 from July 1997.

3.  FOXA – Buyer of 30k of the Jan16 25 puts for 1.275.  FOXA is trading near a 2 month low after the announcement of its pursuit of TWX.  The stock last traded below $25 in February 2013.

4.  AVP – AVP hit a new multi-year low yesterday.  Nonetheless, there was a buyer of 25k of the Aug16th 14.5 calls for 0.25 in the afternoon.  The company reports earnings before the open on July 31.

5.  BA – Buyer pays 3.375 for 6,600 of the Jan15 115 puts, as BA hit a 3 month low yesterday on big volume.  BA last traded below $115 on its breakout to a new all-time high in the fall of 2013.  The stock is down 9% year-to-date.