Wednesday’s Notable Options Activity: $AIG, $AAL, $YHOO, $QCOM, $HOT, $GPRO

by Dan April 9, 2015 7:34 am • Commentary

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

1. AIG – saw a very large bullish roll when the stock was $55.28 a trader sold to close 43,000 Jan16 60 calls at 1.80, and bought to open 60,000 Jan17 60 calls for 4.50. Not only did the year extra cost the trader 2.80 but also a couple of points in implied vol paid.

2. AAL – most of the options activity of late in airline stocks has been call buying but this morning, when the stock was $48.13, a trader sold to close 3100 April 10th weekly 50 puts at 2.10 and bought to open 4,000 May 45 puts for 1.48.

3. YHOO – saw some call buying this morning shortly after the open. When the stock was 44.58, 5000 of the April 10th weekly 45 calls were bought for 18 cents to open, and 4500 of the April 10th weekly 44.50 calls were bought for 40 cents to open. What’s interesting is that the company is not set to report Q1 results until April 21st

4. QCOM – Shortly before noon there was an interesting trade that caught  my eye when the stock was $67.50 a trader sold 20,000 Jan 60 puts and bought 20,000 Jan 70 calls, paid .80 for the package.  The trader breaks even on the upside at 70.80, and on the downside at 60.80. If the stock is between 70 and 60 on Jan expiration the trader losses 80 cents, or $1.6 million in premium.  At 60 or below the trader is put 2 million shares and suffers losses

5. HOT – A trader sold 23,800 Apr 82.5 calls at $3.30 to close, and bought 10,000 May 91.85 calls for $1.77. Earnings are April 29th so it looks like the trader was able to take profits on their in the money calls after the recent run in the stock while keeping an upside potential for the earnings event albeit on a smaller position.

6. GPRO – Out of the money April 1oth weekly 44 and 45 calls were active. Those options expire in 2 days. According to there’s a rumor that the company was canceling an appearance at a conference. The stock itself didn’t have a big reaction to the rumor, especially considering there’s no conferences on the company’s schedule this week to begin with. Either way, some buyers of calls that expire in 2 days felt it’s worth a lotto ticket or two.