Tuesday Options Recap

by: Frederic Ruffy


Market averages are holding modest gains and action is slowing ahead of the holiday break. The stock market closes early today, at 13:00 EDT, and remains closed until Thursday morning. Trading was steady overseas, with modest gains recorded across most major Asian and European equity markets. With no economic news or earnings to drive the early action, the U.S. market also opened steady heading into a report on Factory Orders, which showed a better-than-expected uptick of .7% for May. Stock market averages ticked to session highs on the data. Crude oil is also getting some attention after surging to 6-week highs on concerns about geopolitical tensions with Iran. Oil prices are now up $3.51 to $87.26 per barrel. Gold gained $24.5 to $1622.2 an ounce and the benchmark ten-year Treasury, which closes at 14:00 EDT, is down 8 ticks, pushing its yield to 1.61%. The Dow Jones Industrial Average is up 57 points and the tech-heavy NASDAQ gained 21.5. CBOE Volatility Index (.VIX) is off just .05 to 19.75 ahead of monthly same store sales, ECB, and ADP jobs numbers Thursday. The Labor Department’s monthly report is slated for Friday morning. Trading in the options market is active heading into the final minutes. 4.5 million calls and 4 million puts so far. Happy Fourth!

Bullish Flow

Sirius XM (NASDAQ:SIRI) is up 7 cents to $2.05 in very active trading of almost 11 million shares and July 2 calls on the stock are busy as well. The flow includes a sweep of 3,670 contracts at the 6-cent asking price on AMEX. 6,670 now traded. Total volume is 9,400 calls and 940 puts, a ratio of ten-to-one. No obvious headlines to explain the high volume in SIRI today, but the early options flow seems to be bullish action in the satellite radio operator.

Bearish Flow

SPDR 500 Trust (NYSEARCA:SPY) is now up 51 cents to $137.61 and a Sep 116 - 123 - 130 put fly trades on the ETF for 60 cents, 24000X on ISE. An investor bought the butterfly spread (sold 48,000 Sep 123 puts for the body, bought 24000 of the other two for the wings) to open, according to ISEE. If so, the sweet spot of the position at the expiration is at $123 per share, or a market decline of 10.6%.

Unusual Volume Movers

Bullish flow detected in Forest Oil (NYSE:FST), with 4038 calls trading, or 2x the recent average daily call volume in the name.

Bearish activity detected in Ctrip.com International (NASDAQ:CTRP), with 2377 puts trading, or 2x the recent average daily put volume in the name.

Bullish flow detected in Trina Solar (NYSE:TSL), with 2527 calls trading, or 2x the recent average daily call volume in the name.

High options volume was seen in Consol Energy (NYSE:CNX), Patriot Coal (PCX), and Micron Technology (NASDAQ:MU).