Monday’s Notable Options Activity: $PBR, $BABA, $ACHN, $TSLA, $AMJ

by Enis October 28, 2014 6:44 am • Commentary

One of the lightest options volumes days of the entire year yesterday, as stock volumes also calmed down significantly.

1.  PBR – Petrobras hit a 6 month low after the election results in Brazil.  The bulk of the options volumes were in low premium upside calls, with the Nov 20 and Nov 22 calls both traded over 60k in total for 3 cents and 1 cent respectively.  30 day implied volatility fell to 57.50, its lowest level since early September.

2.  BABA – Options traded nearly 2x the average 1 month volume.  BABA seems to be on a determined path towards $100, and the most active line on the day was the weekly 100 call, which traded over 10k at an average price of 0.9835.  BABA’s intraday high is $99.70 from the day of the IPO.  The company’s first earnings report is before the open on Nov 4th, and the options market is implying about a 6.5% move at the moment.

3.  ACHN – This is a $1.1 billion market cap biotech company.  Someone bought around 25k of the Jan15 20 calls for an average price of 1.67 yesterday afternoon, looks like to close (vs. keeping the long leg of a call spread initiated last year).  That’s a lot of premium to spend (around $4 million) to take off one leg of the spread.  ACHN options are very expensive because of the company’s upcoming Hepatitis C Drug Study Results (see this post from Adam Feuerstein at for more details).

4.  TSLA – Tesla closed down more than 5% yesterday after concerns that September sales were weak, though Elon Musk tweeted about 6 hours ago that the WSJ report was incorrect.  In any case, the stock is at an important technical spot, as detailed in my CotD post yesterday.  Weekly options dominated volumes yesterday, with the weekly 220 puts and the weekly 235 calls the most active lines.

5.  AMJ – The MLP index ETN has declined nearly 20%, then recovered the bulk of that decline in just the past month, incredibly high volatility for a normally quiet sector.  Buyer of 10k of the Nov 50 puts for an average price of 1.54 yesterday morning.