Here is some generally directional, untied options activity that caught my eye during Tuesday’s trading:
1. LL – rallied sharply mid-day Monday on what smelled like BS rumors that Carl Icahn was looking at the company.
2. PFE – not a stock we right about often, and certainly not a stock we see options traders position frequently for short term movement. When the stock was $35 a trader paid 98 cents for 8100 of the April 35 straddle. There do not appear to be any scheduled events, between now and April expiration as Q2 earnings are confirmed for April 28th. This trade breaks-even up at $35.98 and down at $34.02 or about 2.8% in either direction. For the better part of the last six weeks the stock has been trading in a fairly tight range between $34 and $35, so to own the at the money straddle for the next couple weeks you would be playing for a breakout to new highs, or a break-down below the recent range:
3. AMAT – it appears that traders continue to position for the long awaited closing of the proposed merger with Tokyo Electron. When the stock was $22.70 a trader sold 10,000 October 18 puts at .70 and bought 10,000 of the October 25/32 call spreads for 1.21. This package cost 51 cents, and ended up trading 17,500x on the day. This trade breaks-even at $25.51 on the upside, with gains of up to $6.49 between $25.51 and $32, with max gain of $6.49 above $32. Between $25 and $18 the trader loses the 51 cents premium paid, and losses one for one below $18, down about 20%.
4. TAP – the beer company saw a bullish roll when the stock was $73.85, a trader sold to close 14,000 April 77.50 calls at .85 and bought to open 11,000 May 77.50 calls for 2.45 to open. Total options volume ran 10x average daily, with calls making up most of the flow. Q1 earnings are confirmed for May 7th.
5. SWFT – minutes before the close 15,000 of the November 23 puts were bought to open for 1.70 when the stock was $26.05. Today’s volume was more than the existing open interest in the stock coming into the day.