Friday’s Notable Options Activity: $EWZ, $FXI, $NEM, $SPY, $XLY

by Dan March 9, 2015 8:22 am • Commentary

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

1. SPY – despite closing down nearly 1.5% on the day, the largest trade of the day was a massive bullish roll when the S&P500 etf was 208.39 shortly before noon, almost a dollar above where the etf closed. A trader sold to close 100,000 March 215 calls at .08 and bought to open 80,000 March 212 calls for 49 cents. These calls break-even at 212.49, up 2% from current levels, and a level the etf was trading at just last week.  Total options volume in the SPY was 2x average daily volume, with puts outnumbering calls 2.9 million to 1.4 million.

Some got spooked by Friday’s knee jerk reaction in stocks (and bonds for that matter) to the better than expected Feb Jobs data, and want to know where the next real support level is in the S&P500. Look no further than 2000 in the index ($200 in the SPY) as it corresponds almost exactly to the index’s 200 day moving average (circled below):

SPX 1yr chart from Bloomberg
SPX 1yr chart from Bloomberg

2. XLY – the consumer discretionary etf saw a sizable out of the money call purchase, when the etf was $76.16 a trader paid .65 for 54,000 Jan16 86 calls which break-even up 14% in about 10 months.

3. NEM – Gold had one of its worst days in a very long time, closing down nearly 3% on Friday, while the Gold Miner etf closed down 7.5%.  NEM which closed down nearly 8% saw total options volume 3x average, with puts outnumbering calls 2 to 1. When the stock was 24.35 a trader paid .96 for 6500 May 23 puts to open.  This was fairly well timed as the stock closed at 23.30, and those puts closed at 1.33, up more than 30% on a 4.3% move lower in the stock.

4. EWZ – the ETF that tracks Brazilian equities closed at a new 6 year low, and when the etf was 31.93 a trader sold 12,000 Jan16 32 puts at 4.25 to close and bought 12,000 Jan 27 puts for 2.17 to open rolling down a prior bearish view.

EWZ 10 year chart from Bloomberg
EWZ 10 year chart from Bloomberg

5. FXI – on a week that saw China lower interest rates to start the week off, and lower their GDP target, was interesting to see the Chinese equity etf close nearly at 2 month lows, with put volume on Friday more than 3x that of calls at 86,000 to 27,000.  When the FXI was 41.53 a trader paid .19 for 25,000 April 38 puts to open, which break-even down 9% in a little more than a month.