Here is some generally directional, untied options activity that caught my eye during Monday’s trading:
1. AAPL – the stock continues its meteoric rise to new all time highs, closing up 20% on the year, up 27% from its Jan lows and quickly approaching the $800 billion market cap mark. While it’s been a fools errand to stand in the stock’s way for more than a year, the steepness of the recent ascent may be getting just a tad overdone:
When the stock was $131.51 shortly before noon a trader paid 1o cents for the March 130/133/138 call butterfly, selling 4600 of the March 130 calls at 4.00 to close, buying 9200 of the March 133 calls for 2.55 to open, and selling 4600 of the March 138 calls at 1.00 to open. I suspect the trader was rolling up a bullish view. The two most active strikes on the day were the Feb27 (this Friday) expiration 132 and 133 calls with 51,000 of each trading. The stock is a full on mania, in my opinion.
2. M – On Friday we placed a new trade in Macy’s in front of this morning’s earnings report, and detailed the trade (long March 65/67.50 call spread) on Friday’s Options Action on CNBC (read here). It appears that someone out there agreed with our thesis and the trade structure as the March 65 calls were the most active strike on the day with almost 12,000 trading, while nearly 5,000 March 67.50 and 70 calls traded apiece. Total options volume ran 4x avg daily with calls outnumbering puts nearly 7 to 1.
3. CRM – total options volume ran more than 2x average daily, with puts dominating the flow two days before the company reports their Q4 results on Wednesday afternoon. The options market is implying about a 6% one day move which is basically in line with the 4 qtr avg, but below the long term avg of about 7%. When the stock was $63 in the morning, there was an opening buyer of 7500 of the March 57.50 puts for 77 cents. These puts break-even at $56.73, down about 10%. I detailed the activity last night on CNBC’s Fast Money:
4. MBLY – the stock reports its third quarter as a publicly traded company on Thursday after the close. The options market is implying about a 8% one day move which is rich to the two quarter average move of about 4.5%. When the stock was 37.53 it looked like a trader rolled up a bearish view, selling 2000 March 35 puts at 1.15 to close and buying 2000 March 36 puts for 1.70 to open. The stock has been under pressure over the last month as it appeared investors positioned themselves a bit in front of the company’s 6 month IPO lock-up expiration that concluded on Jan 28th:
This stock appears to be a terminal short to me, merely on valuation, trading at 36x(!!!) expected 2015 revenues of $215 million. I am not sure it could ever grow into this valuation.
5. CSC – The company has been targeted by activist investor Jana Partners who took a nearly 6% stake and have held talks with management. The stock gapped to new 52 week and 15 year highs in what looks to be an epic breakout:
Shortly after the open there look to be some profit taking as 5,000 of the June 70 calls were sold to close at 5.40 when the stock was 71.23. And then later when the stock was 72.23 there was a buyer of 5,000 of the March 75/85 call spreads paying 1.60 to open, with a breakeven in a month of $76.60.