Options Flow Summary: General Sentiment, CVS & EMC

CVS Caremark  (CVS)
A large strangle traded in CVS options on the ISE this morning, as a buyer paid a total of $3.10 for 14,000 November 35 puts and 37.5 calls.  Based on current open interest levels and prior trade history, this trade is likely to be closing part of a short strangle sold in early July for $3.05. Given volatility moves over the past months, getting out of this trade for close to breakeven is a significant accomplishment.

EMC Corp (EMC)
It was very bearish trading in EMC options today.  The stock had a down morning and reversed late in the day to close up 1.27% to 20.81.  Buyers were aggressively accumulating the October 20 puts, with close to 25,000 changing hands today.  Implied volatility in that option also rallied from 32 to 35%.

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.