Here is some untied, generally directional options activity that caught my eye during Wednesday’s trading:
1. MSFT – Tuesday’s trading saw call overwriting (read here), and Wednesday saw some decidedly bearish short term positioning in the options market. The stock under-performed all day while the company held their Windows 10 product event, closing down 1% on the day. Options volumes ran hot at about 1.5x avg daily volume with put and call volume pretty close with 66,000 calls and 70,000 puts. The largest block trade on the day was a buy of 10,000 Feb 42.50 puts for .38 when the stock was 45.70. There was also opening buying of the Feb 41.50 puts with 6500 being bought to open for .20 when the stock was $46.
2. EBAY – options volume was more than 4x avg daily with puts outnumbering calls almost 2 to 1 in pre-earnings trading. The most active strike on the day was the Jan 30th 52 puts,with 22,900 trading, with a buy of 7500 of these Jan30 52 puts for .88 when the stock was 53.78. The largest block trade in the stock on the day was a buy of 8700 Feb 48 puts for .38 to open when the stock was 53.63
3. AAPL – while options volume ran below average daily, call volume outnumbered that of puts by nearly 2 to 1. Towards the end of the trading session there was a large put purchase, but it looked to be closing. When stock was $109.85 a trader paid 2.54 for 10,000 Feb 105 puts, they are marked closing vs 42,000 open interest. This could have been closing a bullish view after the stock’s sharp decline last week ($113 to $105.50), and its quick bounce so far this week ($105.50 to $109.50). All eyes will be on the company’s Q1 results due Tuesday Jan 27th after the close, the options market is implying about a 4.5% one day move which is shy of the 4 qtr avg of about 5.25%.
4. XLK – saw a large long dated call purchase. When the tech etf was $40.81 a a trader paid 2.25 for 20,000 Jan16 42 calls. Total volume was almost 4x avg with most the volume coming in the aforementioned trade. This was a very large trade for this etf as there is only 107,000 contracts of total open interest. It is important to note that AAPL makes up 16% of the weight of the XLK, while MSFT makes up nearly 10%.
5. YHOO – saw an interesting trade when stock was $48.26 at 11am, looked like a closing seller of 1600 July 45 calls at 6.50, and an opening seller of 13,000 July 55 calls at 2.35 to open. Likely profit taking on the in the money calls, and possibly an overwrite on the out of the money calls that were opening. If in fact was an overwrite it would make the call-away level at 57.35 on July expiration, up 19%.
6. MAT – saw a large put purchase when stock was $27.52. A trader paid .80 for 16,400 Feb 26 puts, with 20,000 trading on the day. Total options volume ran 5x average daily. MAT reports Q4 results on Jan 30th prior to the open, stock trading at new 52 week lows.
7. EWG – in front of the ECB’s all important QE decision Wednesday morning, traders were aggressively accumulating calls in the German equity etf. In fact, Wednesday’s volume (99,000 contracts) was greater than the entire existing open interest (73,000 contracts) coming into the day. 98,000 of the options that traded were calls, while 1,000 were puts. When the etf was $27.83 in the morning, a trader paid .35 for 30,000 April 30 calls to open, almost 70,000 ended up trading on the day, all bought to open. Additionally, when the etf was $27.76 a trader paid .55 for 20,000 July 30 calls to open.