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Unusual Options Activity Review - AES, HOLX, GME, ANDS, SFSF, TRA, JOSB, CAKE, .VIX, FXI

Bullish Flow

AES is the subject of unusual options activity this week. Open interest, or the number of contracts that have been opened by investors, in January 12.5 strike calls increased by more than 40,000 from Monday to Wednesday. Investors were apparently buying large blocks to open new bullish positions in the electric utility. Thursday, shares added 30 cents to $11.60 and the action continues. Total volume rose to 9X the average daily, with about 29,000 calls and 1,000 puts traded. January 12.5 calls once again saw interest, but April 12.5s were the most actives. More than 20,000 changed hands. It's not clear what's driving the action, but the stock might be worth tracking for trading opportunities in the days and weeks ahead.

Bullish trading was also seen in Hologic (HOLX), GameStop (GME), and Anadys Pharmaceuticals (ANDS).


Bearish Flow

SuccessFactors (SFSF), a California-based business software company, hit a new 52-week high and finished the day up 83 cents to $20.33. Some investors might be looking to "lock in" some profits or hedge bets with put purchases. As shares rallied Thursday, total options volume hit 127X the normal levels. 6,500 puts and 125 calls traded on the session. June 17.5 and June 20 puts were the most actives, with 2,510 and 3,840 contracts traded, respectively. In addition, according to data from web site WhatsTrading.com, 93 percent of the puts traded at the asking price -- which indicates that put buyers were initiating the trades in SFSF Thursday.

Bearish trading also surfaced in Terra Industries (TRA), Jos. A. Banks (JOSB), and Cheesecake Factory (CAKE).


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Index Trading

Volume and volatility in the index market was on the slow side Thursday. 516,000 calls and 608,000 puts traded across all the cash indexes, which is about 93 percent the recent average daily volume. Meanwhile, the CBOE Volatility Index (.VIX) edged above 19.00 midday, but then faltered late in the day to finish down .51 to 18.06. VIX could bounce back to life next week; however, as the "Quadruple Witch" expiration might stir up some volume and volatility in the index market.


ETF Trading   

iShares Xinhau China Fund (FXI), the exchange-traded fund that holds shares in some of China's biggest publicly traded companies, lost 16 cents to $41.35 and put volume picked up to 102,000 contracts (compared to 24,000 calls). The top trades included blocks of 20,000 (40,000 total) April 35 puts at $2.50 and $2.51 per contract. These trades were tied to a position in shares at $41, according to a source on the exchange-floor. This "protective put" play doesn't appear to be a straight bearish bet, but a hedged play on volatility in China's equity markets.


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