Friday’s total option volume of 15.1 million contracts resulted in net open interest growth of 2.09 million calls and 2.10 million puts. Sandridge Energy Inc (SD), Bank of America Corporation (BAC), Dell Inc (DELL) and Apple Inc (AAPL) saw the greatest growth. Top five new positions opened include 50k Sandridge Energy Inc (SD) Jun-13 5 puts, 26k BP Plc (BP) Apr-13 44 calls, 25k MBIA Inc (MBI) Jan-15 5 puts, 25k Nexen Inc (NXY) Feb-13 27 calls and 24k Sandridge Energy Inc (SD) Jun-13 6 puts.
Institutional investors have been buying some downside protection. They have been buying sizeable put positions in the Select Sector SPDR-Financials ETF (XLF) and the iShares Russell 2000 Index ETF (IWM). Single lot sizes have been 100,000 and 50,000 in the XLF and IWM respectively.
In Southwest Airlines (LUV), there was a buyer of over 11,000 Mar 12 calls opening. The stock is at 52-week high and the options volume was 10.2x normal. The next earnings release is expected to be April 18 before market.
Western Union (WU) reports earnings tomorrow. In advance of earnings, there was a buyer of 2,000 Feb 15 calls and 3700 Feb 14 puts. At the end of October, 2012, WU gapped lower from roughly $18 per share to $12. Since then, the stock has climbed back to $14.61 and appears poised to close the gap. On earnings, options investors expect high volatility.