Here is some untied, generally directional options activity that caught my eye during Tuesday’s trading:
1.USO – saw a bearish roll when etf was 17.20, a trader sold 8850 Feb 17/19 put spreads at 1.19 to close and bought 7350 Feb 15/17 put spreads for .68 to open. Total options volume ran 1.75 average daily volume, with 34,000 of each the Feb 18 and 18.50 puts trading on the day.
2. SLB – company reports Q4 results Tuesday after the close, the options market is implying about a 5% one day move vs the 4 qtr avg move of only about 2.25%. Yesterday when SLB was $78.50 a trader paid 1.53 for 10,000 of the Jan 78 puts, or about $1.5 million in premium, assuming a hedge into the print. The stock is down 35% from the 52 week highs, down 10% alone in 2015. With IV approaching new 52 week highs, if this trade was protection, a collar (selling call against long stock, long put) may be one way to lessen the premium outlay and mitigate some of vol crush that will exist following the event.
3. HAL – saw a trader close part of a bullish long dated view,
5. AMD – quickly becoming a distressed equity,$
6. DNKN – positive commentary from the CEO on CNBC in the morning saw the stock rise almost 6% at one point filling in the earnings gap from mid December. There was call buying right out of the gate, when stock was 45.
THERE WAS A VERY LARGE OVERWRITING PROGRAM, WHERE AN INVESTOR SOLD CALLS AGAINST EXISTING LONG POSITIONS IN AN EFFORT TO CAPTURE YIELD OVER THE NEXT 2 TO 6 MONTHS, HERE WERE A FEW THAT CAUGHT MY EYE:
6. CVX – when stock was 105.
7. PFE – when the stock was 32.
Other names that large out of the money call selling occurred in yesterday: JNJ, QCOM, MCD, PPL, TGT, GM, SO & YHOO