Here is some generally directional, untied options activity that caught my eye during Friday’s trading:
1. BHI – saw a large opening put buyer when the stock was 61.58 a trader paid .90 for 11,500 of the Oct 50 puts. These puts seem expensive in both dollar and volatility terms, with a break-even down at $49.10, down 20% from current levels. This purchase caught my eye due to the fact that BHI has agreed to be acquired by Halliburton and $50 was the level the stock was trading prior to the announcement back in November:
I would also add that for most reasons if the deal was called off, BHI would receive a $3.5 billion breakup fee, or about 13% of their current $27 billion market cap.
2. MU – with the stock down 18% on Friday due to weaker than expected results and guidance, options volume ran 6x average daily volume. Two trades caught my eye in the name, first: when the stock was 19.92 a trader rolled a bullish view and sold 23,000 July 25 calls at .02 about bought 11,500 Jan16 26 calls for .58, and second: when the stock was 20.00, a trader rolled down a bullish view in Jan16, selling 10,000 Jan16 29 calls to close and buying 5000 Jan16 24 calls for .86 to open. On Friday we offered some thoughts on how we would consider playing MU for a bounce in the coming days/weeks: Name That Trade – $MU: Huge Loss of Memory
3. ASHR – two large trades in the China A-Shares etf, caught my eye on day when the etf was down 9%. First in the morning when the etf was $43 a trader paid 34 for 30,000 of the July 50/54 call spreads to open, thats about $780,000 in premium to make up to almost $11 million if the stock is between $50 and $54 on July expiration with max gain if the etf is above $54, or up 25%. Also when the etf $43.14 with about 30 minutes to the close a trader sold to close 10,000 Dec 53 puts at 12.30 and bought to open 22,500 Oct 40 puts for 3.15 to open, this appears to be rolling down a bearish view.