Here is some generally directional, untied options activity that caught my eye during Monday’s trading:
1. AMAT – the stock had its largest volume day in more than ten years as the stock declined 8.5% on news that they were calling of their bid for rival Tokyo Electron. Traders had been positioning for months for a deal closing at the end of Q1 with no shortage of upside call buying to reflect bullish views into a deal closure that should have resulted in hundreds of millions of dollars of cost savings. Total options volume ran 3.5x average daily volume with calls outnumbering puts 4 to 1. Most of the call volume was closing, but they weren’t all sold to close. The largest block of options on the day was a buy of 50,000 May 25 calls for .055 when the stock was 20.18, likely closing an overwrite against a long stock position.
2. COH – in front of this morning’s earnings a trader rolled up a bearish position when the stock was $43.35, they sold to close 11,000 May 41 puts at .8o and bought to open 11,000 May 42 puts for 1.15. May calls in general were active with 5800 May 44 calls, 5300 May 1st weekly 46 calls and 4600 May 43.50 calls trading, all looked bought open.
3. PBR – the Brazilian oil company has rallied 90% off of last months lows, and one trader used the strength to buy 80,000 Oct 8 puts to open for 70 cents vs buying stock at $9.61 on a 26 delta. While options prices are clearly elevated, with 30 day at the money implied vol 65%, the one year chart shows the much more extreme levels they got to this past fall when default was on investors minds and they desperately sought protection.