Tuesday’s Notable Options Activity: $AAPL, $XLE, $T, $WMT, $AAL

The S&P 500 index has not closed down by more than 0.35% since Oct. 22nd.  10 day realized volatility remained below 5.  I discussed the volatility backdrop in yesterday’s CotD post.

1.  AAPL – Highest volume day in the stock since Oct. 23rd.  Options volumes were elevated as well, with the weekly 120 and 119 calls the most active lines, both trading over 60k.  The Jan15 120 calls also traded over 60k on the session.  The call to put ratio closed around 2.25, and 30 day implied volatility in AAPL finished the day near 21.50.  AAPL is up 47% year-to-date.

2.  XLE – Heavy put buying yesterday morning as oil turned lower on signs that OPEC production cuts were not forthcoming.  When XLE was 87.64 around 10:00 am EST, a buyer paid .78 for 50,000 of the Dec 5th 86 puts to open.  Later in the morning, looks like an opening buyer of 35,000 Dec 5th 85 puts for .95 and when the etf was 86.75.

3.  T – The Dec20th 35 calls traded over 40k at an average price of 0.24 throughout the session, mostly in the morning when T was down on the day.  T remains down 1% year-to-date.

4.  WMT – Looks like some profit taking in WMT.  Trader sold 18,000 of the Jan15 82.50/85 call spreads at 1.33 to close when the stock was 84.46.  WMT is up 8% year-to-date after the sharp rally of the past month.

5.  AAL – A bullish roll in AAL calls.  Trader sold 5,000 of the Jan15 40 calls at 5.15 to close, and bought 10,000 of the Feb 47 calls for 2.20 to open when the stock was 44.27.  AAL has been unable to convincingly get above the $45 resistance level in the past few weeks.