Williams Companies Inc (WMB), Alpha Natural Resources Inc (ANR), United Continental Holdings Inc (UAL) and Apple Inc (AAPL) saw the greatest growth. Top five new positions opened include 51k Phillips 66 (PSX) Jan-13 55 calls, 43k Alpha Natural Resources Inc (ANR) Jun-13 11 calls, 39k Oracle Corp (ORCL) Jun-13 35 calls, 33k Nokia Corp (NOK) Jan-13 4.5 puts and 27k Williams Companies Inc (WMB) Feb-13 40 calls. It is important to note that going into the last weeks of the year, it is common to see heightened put buying as professional investors attempt to lock in returns through the end of the year.
In addition to the options market taking on a much more bearish tone on Wednesday, equity mutual fund flows continued the relentless outflows last week with outflows at 9bn (outflows in 2012 were the second largest on record behind 2008). The introduction of Boehner’s Plan B bill is seen as a negative for the market if it passes and a negative if it does not. The debate starts today at 9:00 ET.
In Legg Mason (LG) there was notable bearish flow with 3120 puts trading, or 3x the recent avg daily put volume in the name. Shares near $26.625 (0.235) with ATMIV lifting by 1.02 point and 81% of today’s put premium trading offer side. The trade appears to be a put spread involving buying the Feb 26 puts and selling the Feb 22 puts in a 1:2 ratio.
Herbalife (HLF) came under pressure Wednesday afternoon and implied volatility in the options on the stock saw an impressive spike after CNBC reported that Pershing’s Bill Ackman is short the stock. Ackman is expected to present his thesis tomorrow morning. Although the company’s CEO is out defending the stock on CNBC and alleging “market manipulation”, HLF is down $5.65 to $36.85, fresh 52-week lows, on heavy turnover of 15 million shares. 15,000 calls and 43,000 puts traded. Dec 35, 40, 27.5 and 37.5 puts are the most actives and implied volatility in HLF options is up 61.5 percent to 82.5. Nuskin (NUS) is down $3.81 to $41.87 on heavy volume of 3.7 million and falling in sympathy. Dec 40 puts and Jan 45 calls on NUS are seeing interest and IV is up 40 percent to 56.