Friday’s total option volume of 19.3 million contracts resulted in net open interest growth of 2.75 million calls and 2.61 million puts. Bank of America Corporation (BAC), Supervalu Inc (SVU), Exxon Mobil Corp (XOM) and Apple Inc (AAPL) saw the greatest growth. Top five new positions opened include 65k Supervalu Inc (SVU) Jan-15 5.5 calls, 50k Gilead Sciences Inc (GILD) Aug-13 30 puts, 24k Exxon Mobil Corp (XOM) May-13 82.5 puts, 21k BP Plc (BP) Jul-13 45 calls and 20k Research In Motion Ltd (BBRY) Dec-13 11 puts.
Green Mountain Coffee Roasters (GMCR) options order flow seems bearish ahead of earnings. The company is due to report on May 8 after market. An investor sold 3,000 Sep 70 calls on GMCR at $3.20 to buy 4,000 Sep 47 puts for $3.35. The next biggest trade is a May 52.5 – 60 put spread, bought for $3.16, 2320X on ISE. More than 3,000 were bought-to-open. Lastly, it looks like an investor bought 2,300 May 52.5 puts on the stock for $2.10 and sold 1,920 Jun 45 puts at $1. Overall, the flow, especially the Sep 47 – 70 risk-reversal and the May 52.5 – 60 put spreads, seems to be expressing a cautious view for the stock heading into the profit report next Wednesday.
Israel is bombing Syria. The Middle East appears to be on the cusp, once again, of an escalation of conflict. The U.S. stock markets are showing little sign of anxiety about this potential geopolitical risk. The VIX is down to 12.85 from a recent intraday high of about 18. The bull move in stocks is showing renewed strength and a broadening base over the past week.
The Delta Market Sentiment Indicator is bullish and gaining strength. We continue to be buyers on weakness.