Wednesday’s Notable Options Activity: $DAL, $FB, $FCX, $OAS, $SPLS, $X

by Dan January 29, 2015 8:32 am • Commentary

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

1. DAL – Looked like a large bullish roll in DAL when stock was 49.42, a trader sold to close 7500 feb 47 calls at 3.05 and sold 10,000 Feb 50 calls at 1.36 to close and bought the Sept 55/70 1×1.5 call spread 30,000 by 45,000x for about 2.70

2. OAS – in Monday’s trading we highlighted opening put selling in the beleaguered E&P stock:

Shares of the E&P company are down 20% on the year and 76% since August.  When the stock was $13.40 there was an opening seller of 24,000 May 10 puts in blocks between .85 and .80.

Yesterday saw more opening put selling as 24,000 of the May 11 puts were sold to open at 1.05 when stock was 12.88.  This seems like an odd way to make a bullish bet on a stock down 80% from its highs, capping your gains to just 1.05.  You never know, this could be a short (18% short interest) putting in a limit on where to cover.

3. X – Last week when X was 21.85 we highlighted a purchase of 15,000 Feb 24 calls for .59 (read here).  The stock has certainly had a wild ride over the last week, with a Goldman downgrade sending the stock down 10% Friday and today the stock up 15% post earnings at one point to close up 10% on the day.  Throughout the day traders were closing out of their prior bullish bet in the Feb 24 calls, with a block of 11,000 sold to close at .69 when the stock was 23.06, and later in the day 2,000 being sold at 1.40 when the stock was 24.44 near the highs. 23,000 of the 28,000 open interest in the Feb 24 calls traded on the day making them the most active line.  There was some opening put buying though, when the stock was 24.04 a trader paid .25 for 10,000 Jan30th (Friday expiration) 23.50 puts to open.

4. SPLS – options volume ran 6x avg daily volume with nearly all the volume in calls.  When the stock was 16.85 there was an opening buyer of 21,000 Jan16 22 calls for 75 cents, 25,000 ended up trading on the day. It is important to note that back in early December there was heavy institutional buying of calls in SPLS (read here) prior to activist investor Starboard announcement of a stake in SPLS and pushing for a merger with competitor Office Depot.

5. FCX – stock made new five and half year lows today, closing down 25% in 2015.  Total options volume ran 2x average, with puts outnumbering calls almost 3 to 1.  When the stock was 17.41 there was an opening buyer of 20,000 March 6th weekly expiration 15.50 puts for 38 cents.  One trade in the name that stuck out was a long dated buy of 5,000 Jan2016 $10 puts, buyer paying .55 to open when the stock was 17.46, break-even at 9.45, down about 45% from current levels.  The stock is down 55% from the 52 week highs.

6. FB – prior to last night’s Q4 report, the options market was implying about a 7% move for Thursday and Friday’s trading. Options volume ran 2.75x average daily volume with calls nearly doubling the quantity of puts.  Nine of the top ten most active strikes were calls, with the Jan30th weekly 80 and 82 calls the most active trading 18,600 and 15,000 respectively.  After the conference call last night the stock was down less than 2%, and now flat in the pre-market, which could be crushing to premium holders in the weeklies as the implied move inched up a bit this week with AAPL’s strong gains and MSFT’s 10% decline Tuesday.