Intra-Day Significant Options Activity

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ETF / Indices Mentioned: MVR, RTH, XLF
Stocks Mentioned: AKS, BAX, BMY, GPS, MIR, MLM, RRI, SNY, TLM

ETF / Indices
Upside calls were aggressively bid in the Financial Select Sector SPDR (XLF, 36.48, +2.18%) this morning as the sector traded higher. Specifically, there are opening buyers of 70,000 May 37 (.42d) calls paying $0.45 as well as buyers of both the April 36 and 37 strike calls. Also this morning investors sold 150,000 April 35 puts (closing), to buy 75,000 each of the May 35 and 36 strike puts (opening), extending their long protective put positions.  We also continue to see put buying in financial equities today, like CFC and GS, which has been a consistent trend in the last several weeks.

Options in the retail space are active with buyers of puts in both the Morgan Stanley Retail Index (MVR, 203.89, +1.08%) and the Retail HOLDRs Trust (RTH, 103.35, +0.98%). In the RTH investors are buyers of ~2,000 July 195 (.60d) puts while in the MVR investors bought 5,000 May 197.5 (.30d) puts. The order flow appears to be bearish, and is consistent with the delta selling we saw before last week’s same-store-sales releases.

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Building Products
Over the last several days we have seen bullish options order flow in Martin Marietta Materials Inc (MLM, 134.86, -0.33%) amidst weakness in the stock. In the last four sessions opening investors have bought ~6,000 July 100 (.93d) calls (~1,200 today). Also trading today investors bought 1,200 May 130 puts against buying 55,000 shares of stock, getting long ~20,000 shares of stock through the trade.

Electrical Utilities
In both Mirant Corp (MIR, 45.30, +0.78%) and Reliant Energy Corp (RRI, 22.53, +0.81%) we are seeing call sellers.  In RRI opening investors sold ~10,000 August 22.5 (.55d) calls while in MIR opening investors 5,000 January08 50 (.40d) calls.  While the volatility selling marks a departure from recent trend of volatility buying, today’s call sellers are directionally consistent with recent put buyers.

Medical Products
In Baxter International (BAX, 54.02, +0.06%) opening investors bought 3,000 April 55 calls this morning paying $0.25 up to $0.45. The trading is most likely driven by the company's Q1 earnings release, which is expected on Thursday morning (4/19). The participants are likely looking for the stock to trade above $55.45 between now and when the options expire at the end of the week (4/21).

Oil
In Talisman Energy Inc (TLM, 19.69, +1.29%) we have seen steady buyers of upside calls surrounding recent strength in the stock. Today opening investors bought ~2,000 May 20 calls paying up to $0.75. Last week we saw buyers of ~4,000 of these calls paying $0.45. In the last five trading sessions the stock has risen ~7.2%.

Pharmaceutical
We are seeing cautious order flow in Sanofi-Aventis (SNY, 46.19, +1.09%) for the second session in a row. This morning investors bought ~1,700 April 45 (.15d) puts and on Friday investors bought 1,500 of them. Also on Friday investors sold 200,000 shares of stock through May 45 combos (buying puts/selling calls).

In the past week we have seen a notable increase of call buyers in large cap Pharmaceutical stocks such as Bristol-Myers Squibb (BMY), Wyeth (WYE) and Pfizer (PFE).  We have also seen call buyers in the Pharmaceutical Holdrs Trust (PPH) and the Healthcare Select Sector (XLV). The seemingly bullish trading has involved multiple months and various deltas. 

In Bristol-Myers Squibb (BMY, 28.50, +0.6% ) opening investors bought 7,000 May 30 (.25d) calls for $0.40 this morning and just last week we saw buyers of the September 30 calls.

In Wyeth (WYE, 56.80, +0.9%) today investors bought 3,000 April 57.5 calls. This past Friday participants bought 4,000 January 50 calls.

In Pfizer (PFE, 26.92, +0.9%) investors today bought 10,000 September 30 calls and last week we saw buyers of the May and June 27.5 calls in similar size.

Retail – Apparel
In Gap In (GPS, 18.75, +1.52%) opening investors bought ~6,000 May 20 (.30d) calls this morning surrounding unconfirmed takeover speculation being widely reported.

Steel
In AK Steel (AKS, 26.19, +4.7%) the trading appears bullish. Through various trades, participants bought 5,000 May 25 calls (vs. selling April), 3,500 May 30 calls as well as 3,000 September 30 calls (tied to stock). We have also seen June 30 call buyers.  In the past four weeks, AKS is up approximately 20.0%, including +8.2% in the past five sessions.
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