Wednesday’s Notable Options Activity: $CONN, $DKS, $GLD, $RSX, $UAL, $XLE

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

1.UAL – when stock was 61.18 a trader paid 5 cents for 10,000 of the May 95 calls to open. Break-even is at $95.05 in about a month, up 51%. Earnings are expected in the last week of April. The 10,000 calls only equate to $50,000 in premium, which is not a lot for a large institution, but its hard to find a reason why anyone would buy this option, as the options market suggests there is less than a 1% chance these calls are in the money on May expiration.

2. GLD – when the gold etf was 114.71, a trader sold to open 4500 of the May 115 straddle at 3.45. If against long stock could be a yield enhancement strategy for an investor who thinks the etf will be range-bound for the next month or merely a trader willing to bet that the etf will be between 118.45 and 111.55 on May expiration

3. CONN – After closing down nearly 75% in 2014, the beleaguered electronics retailer’s stock is now up 75% in 2015, but still down about 60% from the all time highs. When the stock was 33.26 yesterday at trader paid 1.25 for 2500 of the July 40 / 45 call spreads to open.  This trade breaks-even at $41.25 on July expiration, and has a max payout of 3.75 if the stock is 45 or higher.

4. XLE – looked like a trader closing a prior winning bullish energy trade with crude oil continuing its fairly epic bounce of the March lows that is now equal to about 33%.  When the Energy Select etf was 82 a trader sold to close 33,000 of the June 77/82 call spreads at 3.35.

5. DKS – the sporting goods retailer saw a trader open a bullish trade in the form of a risk reversal.  When the stock was 57, a trader sold to 4600 Jan 52.50 calls at 3.14 and bought to 4600 Jan 60 calls for 3.87, resulting in a debit of 73 cents.  This trade breaks-even on the upside at 60.73 and suffers losses below 53.23 on Jan expiration.

6. RSX – the Russian equity etf broke out to new 5 month highs, closing above its 200 day moving average for the first time since July.  Options volume ran 3.5x average daily.  When the etf was $20 a trader bought to open the Jan 15/20 1×2 put spread 10,000 by 20,000 for 1.05 on a 12 delta (meaning they bought 120,000 shares against the ratio put spread). Leaving the stock aside, the trade breaks-even on the downside at 18.95, with a max gain of 3.95 at 15. The payout trails off from 15 to 11.05, and the trade suffers losses below that level, and above 18.95.