Here is some generally directional, untied options activity that caught my eye during Thursday’s trading:
1. DAL – a buyer paid .55 for 15,000 by 30,000 of the June 47/52.5 1×2 call spread to open when the stock was $42.53. This trade breaks-even on June expiration at $47.55, up 12%, with profits up to $4.95 between $47.55 and $57.45 with max gain of $4.95 at $52.50.
2. TWX – saw a bullish risk reversal trade. When the stock was $84.
3. MET – when the stock was $50.90 a buyer paid $4.15 for 10,000 of the Jan 2017 55 calls to open. These calls break-even at $59.15 on Jan17 expiration, a little less than 2 years, up 16%. What struck me about this trade was first the duration, looking so far out. The stock is cheap at .73x book value, 8x earnings, with a very solid dividend yield of 2.75%. From a purely technical perspective, these calls break-even above the recent range the stock has been in since the start of 2014, which would also be a new all time high:
4. VFC – shares of the apparel holding company saw a bearish roll. When the stock was $75.50 a trader sold to close 10,000 April 72.50 puts at 22 cents and bought to open 10,000 of the May 72.50 / 67.50 put spreads for .90 to open. This trade breaks even at $71.60, with a max gain of $4.10 at $67.50 or lower. Options volume traded 10x average daily on Thursday, equaling about half of the entire open interest in the name coming into the day. Bloomberg estimates the company to report Q1 results on April 24th.