Options Flow Summary: AAPL, ELN & VIX

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Today is another busy day as the markets recover slightly, with close to 5 million single stock options traded at mid-day.

Apple Inc (AAPL)
The most active single issue today is Apple Inc. with 195,292 contracts traded by noon.  The stock is down to near $141.  We are seeing consistent Aug 150 call sellers who are looking to profit from the recent spike in implied volatility.

Elan Corp ADR (ELN)
The second most active on the day is ELN with 110,168 contracts traded.  This is four times the recent daily average.  The stock is down on the day, trading near $17.67.  The flow indicates put sellers in the market who are comfortable to sell August 17.5 puts to create new open interest.

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CBOE Volatility Index (VIX)
There has also been significant volume in CBOE VIX Volatility Index options with nearly 200,000 contracts traded by noon.  The current index level is near 22%, with short term peaks above 23% occurring several times over the past three trading days.  The  traders appear to be aggressively covering short VIX option positions that have accumulated over recent months.  The two-year chart shows current levels at the upper-end of the typical VIX range.  This is a clear indicator of the perceived risk of significant short-term market events.

Todayís focus is on the August and September 25 calls, with 40,000 August and 20,000 September trading in 10,000 lot institutional blocks.  With 168,000 contracts outstanding in the August 25 calls (most were purchased), it is likely that one or more players are crying ëuncleí and closing their positions to avoid further losses.

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