Friday’s Notable Options Activity: $OIH, $T, $EMC, $BHI, $IYR

by Enis November 17, 2014 6:30 am • Commentary

Options volumes were very light on Friday.  In fact, it was one of the lightest days of 2014 for options, a reflection of the very low level of realized volatility (10 day realized volatility in the S&P 500 index hit 4).

1.  OIH – OIH has consolidated in the $42-$46 range over the past 3 weeks.  The oil services ETF saw some aggressive buying on Thursday near the close after the potential HAL bid for BHI was reported, but OIH still closed down 2% last week.  The Nov22nd 44 calls traded over 50k at an average price of 1.03, mostly buyer initiated.

2.  T – The June 35 / 34 put spread traded 19k times at 0.44, vs. the Apr 38 calls trading 35k for 0.33, all in the morning.  T closed at its highest level since July on Friday, benefitting from the shift towards defensive stocks in the past month.

3.  EMC – EMC closed above $30 for the first time since 2001, though it did not break its intraday high of $30.18 from mid-September.  Call buying was significant, including a buyer of 25k of the Jan15 31 calls for 0.80 to open in the afternoon.

4.  BHI – BHI rallied around 15% last week after the HAL news, though the stock is still down more than 20% from its July high of $75.64.  30 day implied volatility jumped to a 2 year high of 57.  There was a buyer of 20k of the Dec20th 62.5/75 call spreads for 2.38 to open vs. selling 20k of the Dec20th 50 puts at 0.63 to open, trading for a net debit of 1.75 as a three-way package in the morning.

5.  IYR – Bearish roll in IYR – trader sells of the Nov 74.50 puts, 10,000 times to close and buys 10,000 of the Jan 73/64 put spreads, paying 0.73 for the package when stock was $75.  IYR has not been able to move above its May 2013 high of $76.21 in the past month.