Here is some generally directional, untied options activity that caught my eye during Monday’s trading:
1. CSX – yesterday in this space we highlighted some call activity in the rail:
CSX – after reporting Q1 results and forward guidance not as bad as some feared after the disappointment Wednesday from Norfolk Southern, and with the announcement of an additional $2 billion share repurchase, calls were active on Friday, 9x average daily, and 7x that of puts. When the stock was $33.20 a trader paid .50 for 10,000 of the May 34 calls to open, 27,000 ended up trading on the day. Also shortly before the close when the stock was 33.22 a trader paid .35 for 8,000 of the May 35 calls. The company is holding its annual shareholder meeting on May 6th, and management will be speaking at Merrill Lynch’s Transportation conference on May 14th.
Yesterday CSX saw a large bullish roll, up and out when the stock was $34.78, up more than 4% on the day, a trader sold to close 20,000 May 34 calls at 1.65 and bought 27,500 June 36 calls for 1.30 to open.
2. TWX – total options volume ran 25x average daily with calls making up more than 95% of the volume. The largest trade on the day was an opening buy of 23,000 July 92.50 calls for .70 when the stock was $84.25. Break-even on this trade is at $93.20, up about 10.5% and above the all time highs made last summer after news that FOX was trying to buy TWX:
3. VZ – options volume exploded yesterday with total volume more than one third of the total open interest. When the stock was $49.32, 100,000 of the Jan16 55/60 call spread traded for 35 cents (180,000 ended up trading on the day). I am being told from market makers that this might have put part of an existing over the counter trade which may not appear as speculatively bullish as it appears. VZ reported Q1 earnings this morning that beat expectations.