Tuesday’s Notable Options Activity: $YHOO, $QEP, $MON, $SUNE, $FCX, $GTAT

by Enis September 17, 2014 6:12 am • Commentary

Options on macro ETFs were more active than single stock options as traders positioned ahead of today’s FOMC announcement.  However, YHOO continues to be a very active name for options traders given Alibaba’s IPO on Thursday.

1.  YHOO – Weekly options dominated volumes.  Largest trade was a buyer of 30,000 of the Sept20th 39 puts for 0.36 to open paired with a purchase of 600,000 shares of YHOO for 41.90.  A separate print was a buyer of 2500 x 5000 of the Sept20th 43 / 45 1×2 call spread for even money, a nice risk/reward trade if you view the odds of a move above 47 as quite low by Friday.  Outside of the weeklies, the Oct 50 call was the most active line, trading over 14k at an average price of 0.74.

2.  QEP – Big 3 way trade:  trader sold 30k of the Sept 31 calls at 1.45 to close, to buy 30k of the Dec 32 calls for 1.84 to open, and to sell 23k of the Dec 29 puts at 0.60 to open.  In effect, the trader rolled the long Sept 31 call position into a Dec 29/32 risk reversal, and collected 0.21 in the process.  QEP has traded between $25 and $35 for much of the past 3 years.

3.  MON – Seller of 21,650 of the Apr 115 calls at 5.15 to open.  MON has sold off more than 10% since its late June high as grains prices have lagged.  The call seller could be an overwrite against a long stock position, anticipating little upside in MON over the next 6 months.  MON’s next earnings report is in early October.

4.  SUNE – Buyer of 13k of the Jan15 21 calls for 2.23 to open.  SUNE has been rangebound since March, between $16 and $24, and 30 day implied volatility recently hit a 2 year low as the stock has stagnated.

5.  FCX – Calls were very active, as calls traded over 4x the 1 month average, largely after the Chinese bank injection headlines hit the tape.  FCX and copper prices both reversed from near 3 month lows.  The weekly 35 calls traded over 20k on the session.

6.  GTAT – Another put roll in GTAT, similar to Monday, as the trader sold 7,000 of the Oct 18 puts at 5.30 and 3,000 at 5.40 to close and bought 17,000 of the Oct 12 puts for 1.30 to open, likely protection.