Options Flow Summary: BMY & General Sentiment
Bristol Myers Squibb Co (BMY)
Just edging out AAPL for the most active on the day is BMY with 140,000 options on the tape. This is more than twice its recent average level. The bulk of the volume involves a 1x2 call spread that traded on the PHLX involving January 08 options. In this trade, a customer bought one Jan 35 call and sold two Jan 37.5 calls for a net debit of $.075.
The stock is currently down $.50 to $31.54. The payoff profile of this trade, as well as the residual buying of upside calls in BMY, suggests that traders are positioning for continued appreciation in the near term.
Down days in the market normally lead to surges in options activity as investors scramble for portfolio insurance. So far, today appears to be no exception. As of midday 2.9 million puts and 3.2 million calls have traded, which is slightly below recent average levels. The flow is dominated by buyers of both puts and calls.
The CBOE VIX index is up 1.68 to 15.89. This is at the high end of the range that the VIX has traded in since mid-March. Many participants are watching closely to see if premium sellers jump in to capitalize on the options market's typical summer doldrums.
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