Friday’s total option volume of 18.9 million contracts resulted in net open interest growth of 2.12 million calls and 2.60 million puts. Bank of America Corporation (BAC), EMC Corp (EMC), Apple Inc (AAPL) and Citigroup Inc (C) saw the greatest growth. Top five new positions opened include 40k EMC Corp (EMC) Jan-14 20 puts, 21k Bank of America Corporation (BAC) Jun-13 14 puts, 20k TD Ameritrade Holding Corporation (AMTD) Aug-13 23 calls, 18k Micron Technology Inc (MU) Apr-13 10 calls and 16k Pitney Bowes Inc (PBI) Jul-13 15 calls.
In BMC Software (BMC), there was a buyer of January 2014 45 and 47 strike calls collectively 7,000. This was 5x normal volume. Last week, there was speculation BMC may be involved in a merger/acquisition. Company management is presenting at industry conferences tomorrow and Wednesday.
In Plains Exploration and Production (PXP), there was a buyer of 11,000 Aug 50 calls. This was 10x normal volume. PXP has agreed to be purchased by Freeport-McMoRan (FCX) for $9 billion. The transaction is expected to close in the second quarter. Options investors are positioning for the possibility the acquisition activity drives the stock above $50.
In Arcos Dorados Holdings (ARCO) – the largest McDonalds franchisee in Latin America – there was a buyer of roughly 5,000 Aug 15 calls. Earnings were reported Friday morning and while shares lifted into the number, they returned to basically flat, and are still well below $19 range seen a year ago. EPS was in-line on worse than expected revenues. However, the company offered better than expected guidance for 2013.