Mid-day Flow Summary: BMC, AAPL & VZ
BMC Software (BMC)
With earnings scheduled for release after the close today, BMC is trading near $31.70 and exhibiting unusual activity in call options on the stock. By midday more than 5200 contracts have traded (10 times the average daily option volume), and much of the volume appears to be call buyers interested in upside exposure at the 35 strike.
With earnings scheduled for release after the close today, BMC is trading near $31.70 and exhibiting unusual activity in call options on the stock. By midday more than 5200 contracts have traded (10 times the average daily option volume), and much of the volume appears to be call buyers interested in upside exposure at the 35 strike.
This trading continues a trend started last week and has been accompanied by growing open interest in the 35 strike calls for the 4 nearest listed expirations.
Apple Inc (AAPL)
The most active single-stock class today is Apple, with 94,000 options on the tape by noon, which is in line with its recent averages. In general, flow is characterized by sellers of upside calls who may be looking for subdued summer activity, or a pause in iphone related highs. Nearly 50,000 out of the money calls have traded, with consistent selling of the June 120 calls for 75 and 80 cents.
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Verizon Communications (VZ)
There has been aggressive put selling in Verizon this morning as more than 15,000 June 42.5 puts have traded for a price of 45 cents across several markets. The stock is up 1% to 42.95.
This flow continues a trend started Friday when nearly 7000 of these puts were sold at prices near 80 cents. Fridayís activity was at least partially closing and traded at implied volatility levels near 20.9%. Todayís activity is likely closing as well, with IV levels continuing to decline to levels near 17.5%, the mid-range of itís recent IV history.
About Henry Schwartz
Henry Schwartz has traded derivatives on US and European exchanges for nearly 20 years. His experience includes market-making and institutional trading at the Hull Group, Salomon Brothers, Bear Stearns and most recently Banc of America Securities, where he led the electronic market-making project coincident with the launch of the ISE. His current work involves real-time stream analysis of options market activity for a number of leading institutional sell-side firms.
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