Friday’s total option volume of 19.1 million contracts resulted in net open interest growth of 3.89 million calls and 3.06 million puts. Bank of America Corporation (BAC), Apple Inc (AAPL), Intel Corporation (INTC) and J P Morgan Chase and Company (JPM) saw the greatest growth. Top five new positions opened include 40k Wells Fargo and Company (WFC) May-13 40 calls, 35k Bank of America Corporation (BAC) Apr-13 13 calls, 34k Saks Inc (SKS) Apr-13 12 calls, 30k Intel Corporation (INTC) Apr-13 19 puts and 26k CommonWealth REIT (CWH) Jul-13 25 calls.
Equity investors today are concerned about a plan to tax bank deposits in Greece as a way to manage the bail out. Under the EU plan to bail out Cypriot banks Cyprus will impose a levy of 6.75 percent on deposits of less than 100,000 euros and 9.9 percent for 100,000 euros or more. This is a break from the normal EU depositor protection scheme where the first €100,000 was protected. But the EU deposit protection is administered at the national level – and the Cypriot government does not have adequate funding to offer that protection. So the worry has to be that deposits may flow out from weak banks in countries with overly indebted governments. But, provided the ECB continues to supply funds to these banks, and banks are seen to be adequately capitalised, an EU-wide credit crunch appears unlikely.
In Cobalt International Energy (CIE), there was a buyer of April 27.5 calls nearly 8,000x. The stock has been volatile and has recently traded down from $37 per share a year ago.
In Intel (INTC), there was a bullish risk-reversal on Friday whereby the investor sold 29,000 April 19 puts and bought 15,000 April 23 calls and 15,000 April 24 calls. This follows the Apr 19-23.5 bullish risk-reversal for even money we saw last week. It may be a play on earnings, due around April 16.