Thursday’s Notable Options Activity: $AZN, $BBY, $CLF, $VLO, $WMT, $X

by Dan January 9, 2015 9:06 am • Commentary

Here is some untied, generally directional options activity that caught my eye during Thursday’s trading:

1.  WMT – saw opening call buying, 10,000 of the WMT March 92.50 calls are bought up to 1.31 starting when the stock was $89.43, and finishing with a buy of 4600 when stock was 89.71.  Options volume ran more than 4x average daily, with calls outnumbering puts 4 to 1.  The stock is on a runaway breakout making new all time highs.  From where I sit the move is preposterous, with the stock trading at 17x this year’s expected earnings that are only supposed to grow 5% on 3% sales growth, with a fairly paltry dividend yield of 2.1%.  Valuation reaching 7 year highs.  This is not one I think you chase low oil or not.

2. CLF – saw opening call buying,when stock was 7.16 a trader paid .38 for 17,000 April 10 calls.  Call volume was 2.5x average daily with total options volume about 1.5x average daily.

3. BBY – saw a bullish roll where a trader sold 4800 Jan 36 calls at 3.95 to close, sold 4500 Jan 35 calls at 4.75 to close and bought 9400 June 40 calls for 3.85 to open.  Total options volume ran almost 2x average daily, most of the volume was in calls.

4. X – saw call buying yesterday with calls outnumbering puts more than 2 to 1, and total volume 1.5x average daily. When stock was 25.13 a trader paid .74 for 6800 March 30 calls, 9800 ended up trading on the day.  Interesting choice of strikes, as $30 seems like a fairly likely target on the upside, as $25 could be very healthy near term support after such a sharp decline:

X 1yr chart from Bloomberg
X 1yr chart from Bloomberg

5. VLO – with stock 49.79 there was an opening buyer paying 1.15 for 10,000 Feb 52.50 calls. The stock has shown extraordinary relative strength to the weakness in crude oil and to most of its peers (except for TSO), only down 17% from the highs made last year.

7. AZN – when stock was 69.43 there was a long dated opening call buyer.  A trader paid 5.55 for 5,000 of the Jan 2016 70 calls.