Here is some generally directional, untied options activity that caught my eye during Thursday’s trading:
1. AMAT – saw opening call buying. When the stock was 24.
3. RSX – 46,000 of the March 13 puts were bought for .15 when the Russian equity etf was $18. The etf made a panic low of 12.50 back in mid December, but 14 looks like fairly strong near term support. These puts have only a 7 delta, the options market is saying it has less than a 7% chance these puts are in the money on March expiration in a month.
4. EWJ – the Japanese equity etf saw some late day call buying when the etf was 12.26 there was an opening buyer of 25,000 March 12.50 calls for .11 and an opening buyer of 19,000 April 12.50 calls for 15 cents. The chart shows the 10% move off of the Jan lows, and for the third time since last summer it’s threatening a technical breakout to new 2 year highs above $12.50:
5. EBAY – when stock was $57.25, a trader sold 10,500 Jan2016 50 puts at 2.50 to open and bought the Jan2016 60/67.50 call spread 10,500x for 2.50, resulting in no cost for the spread. This trade is profitable on Jan2016 expiration between 60 and 67.50 with gains of up to 7.50, with a max gain of 7.50 at 67.50 or higher (up 17.5%). For this size that would be $7.875 million. The position has no gains or losses between 50 and 60, and losses below 50, down about 13%. Prior to Jan2016 expiration this structure will result in losses on a mark to market basis as the stock trades lower towards the short put strike, and gains as trades higher towards the long call strike. The trader is obviously looking to play for a breakout above the 2 1/2 year range and willing to be put the stock at long term support at $50.