Too Many Options: $HLF, $TLM, $JCP, $ACM, $INTU

by Enis August 25, 2014 6:04 am • Commentary

Options volume was light again on Friday, as 10 day realized volatility in the S&P 500 index has fallen to around 5.  Special situations in single stocks had the most active options.

1.  HLF – The Jan16 50 puts was the most active line among all single stock options on Friday.  We delved into the possible rationale for that trade in a HLF post on Friday, with this snippet on the trade itself:

Well, around noon today, the trader rolled the Jan15 50 puts out to the Jan16 50 puts, selling 28,000 of the Jan15 50 puts at $8.05, and buying 32,200 of the Jan16 50 puts for $15.55.  It looks like Bill Ackman is on the move again, paying an additional $7.50 in premium to roll the short HLF view out to Jan16.

By the close, the Jan15 50 puts had traded over 36k on the session at an average price of $8.03, and the Jan16 50 puts had traded over 43k at an average price of $15.48.  HLF has struggled since its weak earnings report in late July, and the stock was down 3% last week.  HLF’s 52 week low is $48.26.

2.  TLM – TLM rallied 2.5% on its highest volume since late July.  Seller of 20k of the Oct 10 puts at 0.375 to buy 20k of the Oct 11 calls for 0.40, traded in the morning, both to open.  The Oct 11 calls ended up trading over 40k at an average priced of $0.5266 by the close.  30 day implied volatility in TLM moved from around 36 to around 46.  The stock is still down 7.5% year-to-date.  Carl Icahn owns more than 7% of the company.

3.  JCP – The stock broke out above $10 last week for the first time in 2014.  Calls have been active in the past week, and there was a buyer of 8,200 of the Oct 10 calls for 0.75 to open in the afternoon.  JCP is up 11% year-to-date after last week’s strength.

4.  ACM – Buyer of 15k of the Dec 35/30 put spread for $1.22 to open.  Aecom hit its highest level since Oct 2007 last week (all time high is $38.22).  The stock is up 26% year-to-date, and its next earnings report is in early November.

5.  INTU – Intuit ended down 2.5% on the session after its earnings report after hitting a new all-time high in the morning.  The Oct 90 calls traded nearly 15k at an average price of 0.77 on the day, mostly seller initiated to open.  The stock is up 9.5% year-to-date.