Here is some untied, generally directional options activity that caught my eye during Monday’s trading:
1. USO – crude oil continues its putrid performance with crude futures having its worst day in more than 2 weeks closing, down 4.5% after being up on the day prior to 10am this morning. Options volume exploded today in the USO etf that tracks the price of WTI, with total volume more than 1.5x average daily volume. When the etf was $21.90, a trader took a bullish view,
2. APC – when the stock was 72.
3. HYG – the high yield debt market continued to be on edge with the 4% plus decline in crude. HYG made a new 52 week closing low despite making up some ground from the morning lows. Options volume ran 3x avg daily, but after what has seemed like endless bearish flow there was a large bullish 3 way trade that went up shortly after 1pm. When the etf was $87 a trader sold 10,000 Jan30th weekly 85 puts at 1.30 to open and bought 10,000 of the Jan 30th weekly 88.50 / 91 call spread for .50, the whole package was down for an .80 credit. If the etf is between 85 and 88.50 the trader collects .80, or $800,000. Losses commence on the downside at $84.20, with a max potential gain of .80 from the credit plus up to an additional $2.50, or $2.50 million if the stock is between $88.50 and $91 on Jan 30th weekly expiration.
4. RSX – seeing opening put buying with the Russian equity etf down 11%
5. MET – when stock was 51.
6. PAY – The stock is up 23% ytd, and seen as a beneficiary of the trend towards mobile payments. In front of last night’s 4q results there was some hefty options activity, particularly in calls where it appeared a to be an aggressive seller of the Jan 36 calls trading to open with the largest block of the 25,000 that traded on the day being 8600 at 70 cents when the stock was 33.45. I suspect this was an overwrite making the call away level at $36.70 on Jan expiration, up about 10%