Options Flow Summary: General Sentiment, Home Builders & CSCO
With the market holding on to another solid rally, the VIX has dropped below 20 for the first time since the big sell-off on July 26th. The option market activity is brisk, with over 10 million contracts trading by mid-afternoon. The broad indexes are up more than 1%. For the second day, we see consistent call buyers and put sellers in the market.
This sector is trading nearly twice its average volume levels today. There are 250,000 contracts on the tape and a 6.68% move in the XHB sector ETF.
BZH is up 25% today to $15. It is the volume leader with close to 35,000 contracts traded and consistent sellers in 10, 12.5, and 15 strike puts. We have also seen repeat algorithmic buyers of upside August 22.5 calls in PHM with prices ranging from $.45 to $1.10.
Cisco Systems Inc CSCO
Cisco options are leading the single stock space today, with 338,000 contracts traded by 2pm. This is 5 times the recent average level. The stock is up 7.45% to $31.90 following last nightís strong earnings, and call-buyers are dominating the flow. August 30 calls are the most active today, with 62,000 on the tape at prices from $1.25 to $2.
As the stock climbs, buyers appear to be accumulating positions. Yesterday saw 60,000 of these calls trade in buyer-initiated flow for prices around $.80. Open interest in the contract grew by nearly 18,000 contracts, confirming significant short-term earnings trades that paid off well.
View Henry Schwartz's post archive >