In a market that had a decidedly risk-off feel today, there was some large apparently directional options trading that might have fit that theme:
GDX: the etf that tracks gold miners saw heavy call volume, 2x average daily volume and 4x that of puts. There appeared to be some rolling activity where traders sold out of Nov calls and bought Dec. The largest block of the day was an opening buy of 45,000 of the Nov 28 calls for 34 cents when the etf was trading $25.55 in the early afternoon. This came a couple hours after 11,000 Dec 27 calls were sold to close at 81 cents, 10,000, Nov 27 calls were sold to close at 39 cents and 5,000 Jan 28 calls were sold to close at 99 cents.
A close today above $25, its first since the early Oct gap below that level could prove to be an important technical occurrence, breaking the downtrend that had been in place since the Aug multi-year highs:
EEM: the emerging market etf also saw what appears to be a bearish roll. Put volume was 4x that of calls, and 1.5x that of average daily volume. 10,000 of the Nov 35, 35.50, 36 & 36.50 puts all traded to close, likely closing put spreads. But the largest block of the day was a buy of 43,000 of the Nov 35.50 puts with a trader paying 32 cents. Some analysts have been warning that a Trump victory could send emerging market stocks into a “tailspin”. The EEM has decent support at $36, but an air-pocket below to about $32:
SPY: the etf that tracks the S&P 500 saw total options volume run hot, at 1.5x average daily, with puts more than doubling the volume of calls. With an etf like the SPY, which institutions use as hedging instrument, hedge options and futures positions with is not particularly useful tell when it comes unusual options volume. For instance the 8 most active options strikes were all puts, but much of the activity looked to be closing, with the largest block trade of the day looking like a closing sale of 40,000 of the Nov 205 puts at $1.15 shortly after the open when the etf was $21292, nearly $2 below where the etf closed. I asked you, does that look like a sale from the smart money?? Main point here is that who knows what those puts were against, SPY, portfolio of large cap stocks, futures, etc? Who knows, so let’s not trade off of that info. I bring it up to gauge sentiment in the options market. Lastly, today’s close below near term support, and its 5th consecutive close below the uptrend that had been in place since the February lows may be a tad troubling to technicians: