Too Many Options: $AAPL, $AEO, $HTZ, $ADSK, $NUE

by Enis August 19, 2014 6:00 am • Commentary

Low volume drift higher yesterday was accompanied by limited options volume as well.  Macro ETF volume has declined considerably in the past week, and single stock options interest is lower after the end of earnings season.

1.  AAPL – AAPL closed just below its July 29th intraday high of $99.44.  Calls traded more than 2.5x more than puts, with the top 6 most active lines all calls.  The weekly 100 calls and weekly 98 calls both traded over 50k on the session.  Outside of weekly options, the Sept22nd 100 and the Sept22nd 105 calls both traded around 30k.  AAPL options traders are pricing in higher volatility for the week of the iPhone 6 release, expected on Sept 9th.

2.  AEO – The Sept 12 calls traded over 40k at an average price of 0.35, mostly in the afternoon.  AEO reports earnings on Wednesday after the close.  The options market is implying about a 9% move, vs. the 4 quarter average of 8.5% and the 8 quarter average of 7.5%.  AEO last traded above $12 in early April.

3.  HTZ – Stock broke out to a new all-tim high above $30 on Monday.  Buyer of 20,926 of the March 29 calls for 4.40 in the morning.  Hertz has been a focus of special situations traders as the company plans to spinoff its equipment rental business, and use the proceeds to pay back debt and buy back stock.  The company has delayed its most recent earnings filing due to an accounting review dating back 3 years.

4.  ADSK – AutoDesk had a big reversal on earnings on Friday, failing to make a new all-time high and then briefly touching a 2 month low.  Buyer of 8k of the Oct 57.5 calls in the morning, paying 1.33 to open.  ADSK’s intraday high this year is $58.68 from February.

5.  NUE – Stock made a new 6 month high on big volume yesterday, and is now up 0.5% year-to-date, after spending most of 2014 in the red.  The Oct 55 calls traded over 12k at an average price of 0.886, mostly buyer to open.  Nucor is expected to report earnings in mid-October.  The stock’s 5 year high is $54.73 from November.