Friday’s Notable Options Activity: $BABA, $CSCO, $IYR, $CDK, $PBR

by Enis November 10, 2014 6:30 am • Commentary

Volumes remained low on Friday, especially in the options market.  Overall market volumes were their lowest since early September.

1.  BABA – BABA was green every day last week, rallying more than 15% in total on the week, a major move for what is now a $280 billion market cap company.  Options volumes on Friday were more than 3x the 1 month average.  The volume was dominated by call buyers, with the Jan15 125 calls and the Jan15 115 calls both trading around 14k on the session.

2.  CSCO – Puts traded over 3x the 1 month average ahead of this week’s earnings event on Nov. 12th after the close.  The Dec 24 puts traded over 17k at an average price of 0.335, and the Nov22nd 24 puts traded over 15k at an average price of 0.225.

3.  IYR – Large 3-way structure.  The Mar 78 calls trade 30k at 0.83 vs. the Mar 75 puts trading 30k for 2.60 and the Mar 70 puts trading 30k at 1.10.  Looks like a put spread collar for a 0.67 credit.  IYR’s 5 year high is $76.21 from May 2013.

4.  CDK – CDK IPO’ed in September.  The Nov22nd 35 puts traded over 25k at an average price of 0.23 on the session.  CDK’s first earnings report as a public company is Nov. 13th before the open.

5.  PBR – The Dec 10 / 12 strangle traded 23k at 0.71 in the afternoon, indicating that a trader expects rangebound price action in PBR over the next 6 weeks.  The stock has held above its March low of $10.20