Here is some generally directional, untied options activity that caught my eye during Friday’s trading:
1. ORCL – options volume ran nearly 10x average daily volume, with much of the activity coming in one large 4 way ratio spread. When the stock was $42.18 a trader did the following:
Bought to open the April 10th 42.50 / 44 1×2 CALL spread 9300 by 18,600 paid .03 AND
Bought to open the April 10th 40.50 / 38.50 1×2 PUT spread 9300 by 18,600 paid .01
Basically the trader is making a non directional play into next week’s earnings (playing for movement in either direction) risking 4 cents. They ideally want the stock to go to $44 on the upside, or $38.50 on the downside. But this is a tricky trade. You know, a lotta ins, a lotta outs, a lotta what-have-yous. And because the trader traded each side on a ratio of 2 to 1, if the stock went up above $45.50, or below $36.5o the trader would start to lose. I suspect this is against a long stock position.
2. USO – crude oil fell out of bed on Friday, with both Brent and WTI down nearly 2%, and WTI very near the prior low from January. USO, the etf that tracks WTI, saw heavy options volume on Friday, nearly 2x average daily, with puts outnumbering calls 2 to 1. When the etf was around 17 was a buyer of the June 15/17 put spreads, paying 80 cents. There also appeared to be an opening buyer of 5,000 of the June 11 puts paying 11 cents.
3. EEM – the emerging market etf remains in as nasty downtrend, approaching key support at $38. When the etf was $38.24 shortly before noon a trader paid 80 cents for 37,000 April 38 puts to open.
4. QCOM – The stock had a bad week, despite Monday night announcing that the company would dramatically increase their share repurchase, and accelerate a large portion of it. Initially trading up nearly 5% to two month highs, only to close on the dead lows of the week, down nearly 7.5% from the highs:
Despite the stock once again in a nasty downtrend that has been in place since mid 2014, one trader looked to play for a rebound over the next week. When the stock was $68.40 an opening buyer paid 29 cents for 11,500 March 70 calls. That’s wagering $333,500 that the stock will be above $70.29 on this coming Friday’s close, or up about 2.7%. Given the series of lower highs and lower lows that has been the course of things since July, and the massive reversal after good news, that premium might have been better used playing for a re-test of $65 in the coming weeks/months:
5. RSX – despite the curious case of absentee Russian President Putin, calls outnumbered puts two to one on what amounted to a large down day for Russian stocks. Total options volume ran 3x average daily, and the two most active strikes on the day were 22,000 of the March 17 calls, and 16,000 of the April 18 calls. The largest block trade of the day was a buy of 9,000 April 18 calls for .30 when the etf was $16.23. The etf has not traded above $19 since the first week of December.