Thursday’s Notable Options Activity: $KORS, $DG, $BMY, $AZN, $MPEL, $GLW

by Enis November 21, 2014 6:30 am • Commentary

A new closing record for the S&P 500 index and the DJIA, though the Nasdaq 100 closed just short.  Options volumes were light ahead of today’s monthly expiration.

1.  KORS – 35k of the Jan15 70 puts were sold at 1.70 vs. 25k of the De20th 77.50 calls bought for 0.80 just before the close, a very large bullish risk reversal for a stock like KORS.  KORS is down about 10% year-to-date and made a 52 week low last week after a disappointing earnings report at the start of November.

2.  DG – Trader bought 29,700 of the Feb 75 calls for 1.65 to open in the morning, when the stock was trading $67.04.  DG hit a new all-time high yesterday, and reports earnings in early December.  However, the break-even on that call position is at $75.65, which is nearly 15% higher than the stock’s current level.

3.  BMY – Buyer of 22k of the Mar 57.5 / 65 call spreads for 2.80 to open.  BMY has rallied more than 20% from its mid-October low, a major move for a $100 billion market cap pharma stock.  It hit its highest level since late 2001 this month.  The stock last traded above $65 in Feb. 2001.

4.  AZN – Seller of over 20k of the Jan15 80 calls, at an average price of 1.66 throughout the day.  Looks like a seller to close vs. buying around 6,500 of the Jan15 77.50 calls for 2.45 and buying 1,840 of the Jan15 75 calls for 3.37.

5.  MPEL – The casino operator has declined more than 40% from its March high of $45.70.  The Dec20th 27 calls traded over 15k at average price of $0.494, buyer to open.

6.  GLW – There was some call buying, but looks closing….largest block was a buy of 10,000 of the Jan2016 25 calls, paying 0.74.  There is 23,000 of open interest, so could be closing out an overwrite.  GLW’s 5 year high is $23.43 from Feb 2011.