Too Many Options: $BIDU, $GM, $CBI, $AMAT, $ACAS

by Enis July 28, 2014 6:01 am • Commentary

Options volumes were very light on Friday, including in the macro-related ETFs that are usually more active.  A lull in earnings reports contributed to the calm.  Here were the standouts:

1.  BIDU – New all-time high for BIDU after a terrific earnings report on Thursday evening, beating on revenues and EPS and guiding Q3 higher.  Mobile growth was particularly encouraging as smartphone use advances at a robust pace in China.  BIDU is now up 27% year-to-date.  The Aug16th 220 calls tread nearly 18k at an average price of $8.04 on the session, the most active line of the day.  A trader had rolled the Aug16th 200 calls up to the 220 calls on July 22, as we noted in a TMO post:

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.

That trader likely took profits on the 220 calls on Friday.

2.  GM – GM hit its lowest level since early June after a weak earnings report on Thursday.  The most active line was a buyer of 33k of the Sept 42 calls for 0.15.  GM has not traded above $42 since its IPO in late 2010.

3.  CBI – Stock closed down 9% on Friday to hit its lowest level since Sept 2013.  Earnings disappointed investor expectations.  The stock is now down 24% year-to-date.    Buyer of 9k of the Aug 65 calls for 1.95 vs. selling 19k of the Aug 70 calls at 0.38, rolling down a long call position in August.  CBI’s earnings gap from Thursday is $69.48.

4.  AMAT – Buyer of 15k of the Jan15 25 calls for 0.67 just 10 minutes before the close.  AMAT had a rough week, falling nearly 8% last week.  The company reports earnings on August 14, and is still up 20% year-to-date.  AMAT last traded above $25 since November 2013.

5.  ACAS – Buyer of the Aug16th 16 calls in the morning, which traded 14k at an average price of 0.30 on the session.  ACAS is an alternative asset manager that is flat in 2014.  Its high of the year is $16.37.  The company reports earnings after the close on August 6.