Unusual Options Activity Review - GM, EK, SWKS, XLF
Unusual Options Activity Review For Monday, June 20, 2011
Bullish Flow
GM added 53 cents to close $29.52. Earlier Monday an investor sold 15,000 Jul 31 calls on the automaker at 31 cents each. The trade was tied to 280K shares at $29.50. August 30 calls saw interest as well with 10,660 contracts traded, mostly smaller lots traded at the asking price. Overall sentiment seemed to be leaning on the bullish side. Shares are up 4.5 percent from the 52-week low of $28.17 set Thursday, but down 7.5 percent month-to-date.
One of the top equity options trades Monday was a 20,000-contract block of Jul 5 calls on Eastman Kodak (EK). It was bought at 8 cents per contract. The same investor also sold 10,000 July 3.5 calls at 40 cents each. They collected 24 cents for the 1X2 backspread and might be rolling a position up in strikes. The spread traded more than once and volume in the Jul 5s is now 26,500 while open interest is 23,105.
Bearish Flow
Skyworks Solutions (SWKS) closed at $21.70 which is down -$1.46. Implied volatility was up after Deutsche Bank cut the stock to Hold from Buy. 28,000 puts and 8,200 calls traded on the Woburn, MA chipmaker. Much of the volume was in August in-the-money and out-of-the-money puts, with some players likely exiting positions after a four-month 40.7 percent slide in the share price. August 25 puts, which are 12.8 percent ITM, were the most actives and 4,600 traded (71 percent Bid) against 3,976 in open interest. Still, some investors were likely taking new positions in reaction to the downgrade and implied volatility in SWKS is up 10 percent to 54.
ETF Trading
SPDR Financials (XLF) lost 1 cent to close $14.88 after Citi analysts cut price targets on GS, MS, and BAC, while lowering EPS estimates on JPM. Meanwhile, in options trading, a 29000-contract block of XLF Jul 14 puts traded at 14 cents on ISE, where sentiment data indicated a customer bought-to-open and in total 44,570 contracts traded. Jul 15 puts and calls on the financial ETF were busy as well. One player bought the straddle at 76 cents, 10000X. The position was tied to 50K shares at $14.90 and it looks like it traded more than once.
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