Monday’s Notable Options Activity: $AAL, $AAPL, $CMCSA, $SCTY, $UAL

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

1. AAL – after trading down 6% shortly after the open, capping a 17% decline from last week’s all time highs, the stock staged a huge reversal, closing down less than 1% on the day.  When the stock was $46.50 there was a large bullish roll down in upside calls, a trader sold 10,000 March 57.50 calls to close at .52 and bought to open 10,000 March 52.50 calls for 1.36.

2. UAL – saw a large bearish roll when the stock was $68.25, a trader sold 5,000 Feb 60 puts at .99 to close and bought 10,000 Feb 55 puts for 47 cents to open.  Shortly after the open when UAL was $66 I closed a near term bearish trade that was playing for a move back to the mid $60s.  With the stock down 10% in two trading sessions I took the quick profit and considered myself happy to avoid the sector altogether as I have found the price action to be entirely irrational (read post here).  Here’s the three day chart of UAL, buckle up and take your motion sickness meds:

3. SCTY – another sector that has traded along with the volatility in oil has been solar.  At one point SCTY was up 10%, closing up 8.5% and calls were very active at 5x average daily. When the stock was $52, a trader paid 1.31 for 3600 Feb 56 calls to open, 5200 ended up trading on the day.  The next most active strike as the Feb 55 calls, with 2500 trading, most look to be bought. The company is confirmed to report their Q4 results on Feb 18th.

4. AAPL – the stock staged a healthy late day recovery on a day the iPhone maker sold $6.5 billion in dollar denominated bonds.  Shortly after the open when the stock was near the lows of the day at 117.20 a trader paid .92 for 23,000 Feb 13th (next week expiration) 121 calls to open.  The three most active strikes on the day all expired this week, and all calls: 42,000 Feb weekly 120 calls, 38,000 Feb weekly 118 calls and 30,000 Feb 117 calls.  I think it is safe to say that short term traders are playing for a breakout above the recent highs at $120.

5. CMCSA – looked like a massive opening put sale when the stock was $52.60, 45,000 of the Feb 6th weekly 54.50 puts were sold at 2.15 to open, or $9.67 million in premium.  If the stock is above $54.50 on Friday’s close the premium seller would collect the full $2.15.  Obviously we have no idea what the intent of the trade was, and if in fact it was an outright bullish bet, you never know, it could be to cover a short position of 4.5 million shares.  Most likely it is a trader setting a limit order, where they would be happy to buy the stock at $52.35 on this Friday’s close.  If this is the case, the 1 yr chart below of CMCSA 30 day at the money implied vol could be the reason as it approaches 1 year highs: