Relatively light volume day on Monday ahead of the busy event schedule for the balance of the week (see yesterday’s The Week Ahead post for more details). The CBOE composite put/call ratio closed at 0.83, well below the average of the past 2 months.
1. CBS – The single largest print in the single stock options market yesterday was in the Dec20th 55 call line, with one large seller of 59k at 2.10 to open. That’s abnormally large size for a stock that usually trades around 12k calls across all lines in a single day. The company reports earnings after the close on Wednesday, Nov. 5th. The options market is pricing in around a 4.5% move, which is above the 4 quarter average of 3.75%. The $55 level was important support in the first half of 2014 that might now act as resistance.
2. DXJ – Japanese ETFs continued to see active call volumes. Buyer of 30k of the Dec20th 58 calls for 0.70 in the afternoon. The break-even on that trade (which involved an outlay of $2.1 million) is $58.70, which is up another 7% from yesterday’s close in DXJ.
3. ADSK – Autodesk has rallied right back to the $57.50-$59 area where the stock has ran into resistance on multiple occasions since late February, including in early October. There was a buyer of 20k of the Jan15 70 calls for 0.45, possibly playing for a breakout into and out of the company’s Nov. 20th earnings report.
4. MU – MU has rallied back to near its high of the year, which is $34.85 from July. 12,741 of the Jan15 30 calls traded for 4.70 vs. 19,114 of the Jan15 34 calls at 2.30, printing together, possibly a roll of a call position. MU’s next earnings report is in early January.
5. BRCM – BRCM hit a new 3 year high on Friday. Buyer of 5k of the Dec20th 42 calls for 1.52 shortly after the open. BRCM is up 41% year-to-date.