Wednesday’s Notable Options Activity: $XLE, $XOP, $FB, $VNET, $MTG, $POT

by Enis September 11, 2014 7:42 am • Commentary

The energy sector continues to be the most volatile, with XLE breaking $95 support for the first time since May.  Options volumes were highest in the sector, with puts dominating.

1.  XLE – The Oct 95/93 put spread traded 28k times at 0.85 shortly after the open, looks like a trader selling the Oct 95 puts and buying the Oct 93 puts, rolling down put protection and taking in 0.85 in premium in the process.  XLE 30 day implied volatility has bounced sharply in the past 2 weeks as the ETF has sold off nearly 4% in September:

XLE 30 day implied volatility, courtesy of Bloomberg
XLE 30 day implied volatility, courtesy of Bloomberg

2.  XOP – Two separate trades, with a trader rolling around 10k of the Sept 72 puts out to the Oct 72 puts, paying $1.14 for the roll.  Shortly after that trade, someone sold the Oct 72 / Oct 71 put spread at $0.29, looks like rolling down that protection to the Oct 71 put strike.  XOP touched its 200 day ma yesterday, now around $73, for the first time since early February.

3.  FB – Seller of 73k of the Sept20th 80 calls at 0.36 to close in the afternoon.  FB’s high so far this week is $78.17, and the company surpassed the $200 billion market cap milestone for the first time this week.

4.  VNET – This is a Chinese internet company that has declined nearly 30% so far this week.  Puts were very active, with a buyer of 11k of the Sept20th 22.5 puts for $4.20 the largest single trade of the session.

5.  MTG – Seller of 22,450 of the MTG Jan15 10 calls at 0.25 to close.  MTG’s high of the year is $9.50, and the stock has not traded above $10 since January 2011.

6.  POT – Potash stock hit a 3 month low this week, but there was an aggressive call buyer of the Sept20th 34.50 calls yesterday.  That line traded at average price of $0.226 for over 18k on the session.  POT is up 3% year-to-date.