Unusual Options Activity Review: HOLX, TASR, CMC, SE, MDVN, JNPR, LAMR, BEAV, .VIX, XLF

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Bullish Flow

Hologic (HOLX), a Bedford, MA medical equipment company, saw an increase in options action Monday. Shares finished the day up 8 cents to $16.19 in a day or quiet trading. However, options volume rose to 2X the average daily. 4,340 calls and just 180 puts traded on the session. April 17.5 calls topped the most actives. 3,530 contracts traded. In addition, since most of the action hit at the asking price, it looks like call buyers were taking positions and looking for HOLX to head higher in the weeks ahead. No news on the stock Monday. The company announced settlements in patent infringement lawsuits Friday afternoon.

Bullish trading was also seen in Taser (TASR), Commercial Metals (CMC), and Spectra Energy (SE).


Bearish Flow

Medivation (MDVN) was the subject of bearish spread trades Monday. Shares of the San Francisco, CA biotech lost 95 cents to $36.67 and one investor apparently initiated a June 25 - 17.5 put spread, 2500X. That is, they bought 2,500 June 25 puts and sold 5,000 June 17.5 puts to create a bearish spread that yields its best profits if MDVN falls to $17.5 by June expiration. Another investor sold the Mar 40 - 50 call spread at $3.50, 6000X. While the put spread looks bearish, the call spread looks like the exit from a bullish spread as shares fell Monday.

Bearish Bearish trading also surfaced in Juniper Networks (JNPR), Lamar Advertising (LAMR), and BE Aerospace (BEAV).

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Index Trading

The CBOE Volatility Index (.VIX) slipped .12 to 19.90 despite a 1.2 point loss in the S&P 500 Index Monday. In the options market, one noteworthy trade hit the VIX Monday morning when an investor sold 25,000 April 22.5 calls to buy 75,000 April 32.5 calls. This call ratio backspread fetched a 30-cent credit and will make money if 1) VIX stays below 22.5 or 2) rallies beyond the higher strike by the April expiration.

ETF Trading   

The Financial Select Sector Fund (XLF), which holds all of the financial names from the S&P 500, added 19 cents to $14.65 amid relative strength in the sector Monday. However, the tone of trading in the options market remained defensive, as 133,000 puts and 65,000 calls traded on the ETF. March 14 puts were the most actives. Buyers appeared to be taking positions Monday amid the ongoing uncertainty regarding the outlook for the banking world. More than 50,000 contracts traded on the session.


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