Unusual Options Activity Alert: Interactive Brokers Group (IBKR)
General Sentiment
Broad averages are generally higher in active trading today as many participants contemplate ëyear-endí portfolio adjusting and ongoing retail and financial news.
The industry benchmark SP500 index now stands above $1515. This is several percent off the highs set in October but more than 100 points above the chaotic 1407 level touched a few weeks ago.
Interactive Brokers Group (IBKR)
Holders of IBKR have experienced a lackluster range since the stock IPOd at $30 in May. IBKR options normally trade a quiet 1,137 contracts per day. However, with the stock touching $32 today, IBKR options have seen a major burst of activity. By mid-day, there were more than 28,000 contracts on the tape. Virtually all of this activity involves calls with buyers focused on the upside strikes.
A large diagonal call spread traded on the CBOE near noon. In this trade, the customer purchased 15,000 March 35 calls and sold 10,000 Dec 30 calls in what appears to be a roll of long calls.
IBKR's trade history reveals that an aggressive buyer paid $1.10-$1.15 for the December 30 calls over the past two months. These same calls were sold today for $2.00.
In a bullish move, this investor appears to be rolling the proceeds of this winning trade up and out to the March 35 strike. 15,000 March 35 calls were purchased for $1.40 in todayís spread.
This buyer apparently expects the stock to remain above its IPO range for the foreseeable future. He also expects a positive outcome from the January earnings report.
Posted By: Trade Alert
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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.
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