Thursday’s Notable Options Activity: $AMD, $CMCSA, $GLD, $P, $RL, $TWTR

by Dan February 6, 2015 8:15 am • Commentary

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

1. GLD – as equities found their footing over the last week, Gold (as represented by the etf GLD) has retreated from 5 month highs, settling on its 200 day moving average (yellow line below):

GLD 1yr chart from Bloomberg
GLD 1yr chart from Bloomberg

When the etf was 121.13 there was a bullish roll up and out where a trader sold to close 14,600 Sept 135 calls at 2.60 and bought to open 27,000 Jan16 140 calls for 3.10 to open.

2. CMCSA – over the last few days we have highlighted a very large opening put sale in the weeklies at the start of the week, and as the stock has risen the trader took profits, from Tuesday’s Notable Options post:

CMCSA – Monday we highlighted an opening put sale in the weeklies in CMCSA:

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, or $9.67 million in premium.

Yesterday when the stock was up 2.5% at $55, it looks like the trader bought back some of those puts to close for .77, netting a quick profit of $2.76 million on the 20,000 options that were covered.

Today when the stock was 56.83 the original put seller bought to close the balance of this position, buying 20,500 Feb 6th weekly 54.50 puts for .08 to close, netting a 2.07 profit on 20,500 contracts or $4.25 million.  WOW. That trade was nothing short of Awesome.

3. AMD –when the stock was 3.23, there was an outright bearish bet that caught my eye on day the stock was up 17%. a buyer paid .37 for 43,000 July 3 puts to open, or about $1.6 million in premium. Likely put buying from an investor long the company’s debt.  Some would say the company’s equity is near distressed given their lack of earnings, flat sales and the fact that their $2.55 billion market cap is almost equal to their $2.2 billion in debt, or $1.2 billion net of cash

4. RL – the stock is trying to find its footing after yesterday’s 17% decline. Shortly after the open when the stock was $141.70, there wss an opening bullish risk reversal, a trader sold 1400 April 135 puts at 3.20 and bought 1400 April 155 calls for 3.70 to open. The trade breaks-even at 155.50 on the upside, and put the stock at 135.50 on the downside.

5. TWTR – total options volume neared 3x average daily volume with calls outnumbering puts by a ratio of 1.5 to 1. The stock  saw a pre-earnings bullish roll,when the stock was $42 a trader sold 5700 Feb6th weekly 41 calls at       3.05, and bought 11,000 Feb 13th 44 calls for 2.01 to open.  The implied move in the options market was about 12.5% vs the 4 qtr avg of about 15%.

6. P – Pandora reported a disappointing fiscal Q1 and the shares plunged, down 20% as I write in the pre-market. The options market was implying about a 11% one day move which is shy of the 4qtr avg move of about 12.50%. At least one trader/investor was either skeptical or reaching for short term protection into the print as the largest trade yesterday in the options market was an opening buy of 14,000 Feb6th (today) expiration 16 puts when the stock was 18.21. It’s also fascinating that the stock’s average move over 10 qtrs since going public the average move is about 13.5%, with only one up move post results and that was its first reported quarter as a public company back in August 2011.  Today’s move aint gonna help that negative trend.