Wednesday’s Notable Options Activity: $SMH,. $UUP, $YOKU

by Dan March 26, 2015 8:26 am • Commentary

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

1. SMH – the Philadelphia Semiconductor Index (SOX) absolutely got smoked yesterday, closing down 4.6%, blasting through the breakout level in mid February, and possibly making a near term double top:

SOX 1yt chart from Bloomberg
SOX 1yt chart from Bloomberg

One trader used the weakness to roll a bearish or defensive in the SMH (the etf that tracks the SOX), when the etf was $54.27, 50,000 of the April 55 puts were sold to close at 1.55 and 50,000 May 53 puts were bought to open for 1.40.

2. YOKU – with the stock just a tad above the all time lows, and down 22% on the year, a trader paid .15 for 30,800 of the April 15 calls to open vs selling 462,000 shares at $13.72.  This company has a sort of YouTube./Hulu service in China, and is 25% owned by Alibaba, which is why we have any interest at all in the stock.

3. UUP – a little more than a week ago we highlighted some put buying in the UUP, from March 18th:

UUP – the Powershares US Dollar etf sees a massive put purchase, when the etf was 26.29 a trader paid .12 for 250,000 June 25 puts to open. The premium on this trade is $3 million, and breaks even at $24.87 down 5.4%, a level where the etf traded about a month ago

With the etf at $25.54 yesterday, it looks like the trader booked a gain on the position, selling 125,000 of the June 25 puts at .25 to close, doubling their money on half of the position.