Options Flow Summary: General Sentiment, CVS & EMC
The US markets were generally lower today, with the CBOE VIX lifting from 17 to 18.04 as traders adjusted risk premium to reflect a bit more uncertainty regarding the equities market. Option volume was light, with nearly 4.5 million each of puts and calls trading by late afternoon.
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%.
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