Monday’s Notable Options Activity: $MSFT, $BHI, $HAL, $CBS, $BRCM

by Enis November 18, 2014 7:00 am • Commentary

Another low volume, tight range trading session.  10 day realized volatility in the S&P 500 index hit 2.5, its lowest level of the past decade.

1.  MSFT – Most of the call volume in MSFT was related to the stock going ex-dividend today (see this education post for more details).  However, there was one relevant call line that was a real transaction – the Nov22nd 50 calls traded over 60k at an average price of 0.19 throughout the session.  The company presents at the UBS Technology Conference on Wednesday morning.

2.  BHI – BHI closed up 9%, but remains at a large discount to the HAL bid price, reflecting the market’s uncertainty about the deal closing.  Puts were more active than calls yesterday.  The largest trade was as follows:  the Nov22nd 65 put was sold 20k at 0.70, vs. a buyer of 20k of the Jan16 52.5 put for 2.80, both to open.

3.  HAL – Halliburton shares closed down more than 10% after market participants were disappointed in the terms of the deal.  Options traded over 5x the normal 1 month volume.  Buyer of 10k of the Jan16 60 / 70 call spread for around $2 in the morning.

4.  CBS – CBS failed just below its falling 50 day moving average (now around $53.50) yesterday.  CBS has not traded above its 50 day ma since August.  Trader rolled a call position from Nov22nd to Dec20th, with the Nov22nd 53 calls trading 20k at 0.75 vs. the Dec20th 55 calls trading 20k for 1.10.

5.  BRCM – Buyer of over 15k of the Dec20th 44 calls for an average price of $0.56 throughout the day.  BRCM has not traded above $44 since Feb. 2011.  The company is holding its annual analyst day on Dec 9th: