Wednesday’s Notable Options Activity: $CHK, $LEN, $SODA, $YOKU

by CC March 19, 2015 7:22 am • Commentary

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

1. LEN – Lenar (LEN) reports their fiscal Q1 results this morning before the open. Read our preview from yesterday here. The options market was implying about a 6% one day move which is rich to the 4 qtr average move of 4%.  Yesterday a trader sold 10,000 of the May 55 calls at .48. The open interest on the line going in was about 8,000 so it’s unclear if most of the trade was closing but it could have been.

2. SODA – was up 6% Wednesday, with a spike mid day on rumors. A trader sold 5000 March 20 puts after the spike, likely closing. Open interest was just a little higher than the volume on the day and that line stuck out like a sore thumb compared to the other lines in March.

3. YOKU – reports today after the bell. Yesterday a trader rolled a call position out a week and down 50c looking for a little more juice into the event. The trader sold to close 4000 of the March regular 16’s at  30 and 25 cents and rolled to the March 27th 15.5’s for about 25 cents more for the roll. If that was in fact a roll it’s actually quite smart. The trader rolled down their strike by 50 cents in strike while getting out of 140 vol and buying 70 vol a week later. That’s a dollar cheap way to roll and get more oomph for earnings.

4. CHK – Sometimes you see a trade that doesn’t make any sense and there was one in CHK yesterday. When the stock was 14 a print of 43,000 March (this week) 13.50 puts were bought to open for .25 while the bid/ask on that strike was .16x.19. The trade was cancelled then reported out of sequence a few minutes later.  The stock has no scheduled events, but if there was some unforeseen bad news for the stock in the next two trading days I am hard pressed to think that the put purchase would not be a massive red flag for regulators.