Tuesday’s Notable Options Activity: $XLE, $VIX, $GDX, $HUN, $MCD, $IMAX

by Enis November 19, 2014 7:00 am • Commentary

Another new all-time high for the indices, and single stock options were heavily skewed towards calls, though ETFs saw some put activity.

1.  XLE – Energy remains the main lagging sector in 2014, still down 3% year-to-date.  Opening buyer of the Dec5th weekly 83 puts for 0.91 to open in XLE, 120k times.  This trade was paired with buying 3 million shares of XLE for 85.95 (25 delta).  This could be someone buying XLE long along with protection, or simply initiating put protection on XLE and pairing it with stock to get a better price from the market maker (then trading out of the stock later on their own).

2.  VIX – VIX puts actually traded more actively than calls, a rare occurrence, as traders positioned ahead of VIX expiration this morning.  The Nov 13.5 puts traded over 120k on the session.  VIX spot has not moved below 12.50 since September.

3.  GDX – Big 4 way trade in GDX – trader sold 26,000 of the Jan16 12 puts at .50 and and 13,000 of the Jan16 13 puts at .65 to open, and bought the Jan16 20/26 call spread 39,000 times for 1.70 to open.  GDX has bounced in the past 3 weeks after making a new 5 year low in late October.  The $20-$21 area was prior support that could now be resistance for GDX.

4.  HUN – Trader rolled a risk reversal position in HUN from Nov to Feb, as the Nov 24 / 27 risk reversal traded 30k times at 0.09 vs. the Feb 24 / 27 risk reversal that traded around 25k times for around 0.25.  HUN’s high from 2014 is $29.33.

5.  MCD – The Jan15 95 calls traded over 25k at an average price of $2.825, mostly buyer initiated.  MCD has bounced 7% since the mid-October low, and some possible activist rumors have emerged as well.

6.  IMAX – Trader rolled calls from Dec to Mar, selling 22,562 of the Dec 30 calls at 0.90 to close. vs. buying 26,746 of the Mar 33 calls for 0.90.  IMAX’s 2 year high is $31.23 from Nov. 2013.  The stock’s next earnings report is expected in late February.