Monday’s Notable Options Activity: $CLF, $GDX, $INTC, $M, $XLV, $WMT

by Dan March 10, 2015 6:56 am • Commentary

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

1. GDX – the gold miner etf is down 11% over the last 2 days, closing on the dead lows of the session on Monday, down 3.6% on the day. Total options volume ran 1.5x avg daily with calls outnumbering puts 73,000 to 58,000. There were two large trades that caught my eye, first when the GDX was $18.17 in the morning a trader paid .80 for 12,000 April 18 puts to open. And in the afternoon when the etf was $17.94 a trader sold to close 10,000 of the Jan 20/26 call spreads at 1.12 apparently giving up on a prior bullish bet.  The 10 year chart below shows the etf once again in shooting distance of the the prior 52 week low of $16.45 made a year ago,  just above the 10 year lows in the throes of the financial crisis:

GDX 10 year chart from Bloomberg
GDX 10 year chart from Bloomberg

2. CLF – made fresh 10 yr lows, closing down 7.5% on the day. June calls were active, and total options volume ran 3x average daily while calls outnumbered puts 2 to 1.  When the stock was $5.77 a trader paid .30 for 12,000 June 8 calls to open, 23,000 traded on the day.

3. XLV – the Healthcare Select etf saw a large bearish roll,. When the etf was $71.87 a trader sold to close 45,000 March 69 puts, and bought 18,000 June 69 puts for 1.51 to open that break-even at $67.50, down 6% from the current levels.

4. WMT – saw a bullish roll. When the stock was $82.65, a trader sold to close 20,000 March 85 calls at .12 and bought 10,000 April 85 calls for .56 to open.  The stock is down about 3.5% on the year and down 9% from the all time highs made in early January. On Friday’s Options Action my friends Carter Worth and Mike Khouw offered up a bullish technical outlook for WMT shares and detailed a trade to express this view, watch here.

5. INTC – Total options volume ran 2x average with short dated puts active on a day that saw the stock massively under-perform the broad market, closing down 1.4% vs the Nasdaq up 30 bps. The price action and options activity was sooo interesting I wrote a post on it, read here.  The most active put strikes on the day are 15,000 of the March 32.50 puts, 11,000 March 31.50 puts, 8,000 of the April 2nd weekly 32 puts and 7,500 of the March 33 puts, many bought to open.  The largest blocks in puts on the day was a buy of 4.000 March 31.50 puts when the stock was $32.53, which break-even at $31.28 down almost 4% in 9 trading days. But the largest block on the day were calls, and the flow didn’t exactly look bullish. When the stock was $32.72 a trader likely rolled an overwrite of long stock, buying to close 8,000 March 35 calls for 4 cents, and selling to open 8,000 May 35 calls at 47 cents. If in fact this was an overwrite of long stock the intention is to add .47 of yield if the stock is 35 or lower on May expiration.

6. M –  When the stock was $62.60 a trader bought a call spread risk reversal, selling to open 4500 April 60 puts at .80, and buying to open 4500 of the April 62.50/65 call spreads for 1.00, this trade cost 20 cents, and breaks-even at 62.70, with a max gain of 2.30 at 65 or higher. The trade losses 20 cents between 62.50 and 60 and put the stock at 60 or below.  As for my view on M, my bullish trade from last month is running out of time, and needs a mover above $65.65 by next Friday’s close to just break-even, read here.