Thursday’s total option volume of 21.2 million contracts resulted in net open interest growth of 3.12 million calls and 3.24 million puts. Bank of America Corporation (BAC), Hewlett Packard Co (HPQ), J C Penney Company Inc (JCP) and Facebook Inc (FB) saw the greatest growth. Top five new positions opened include 25k Hillshire Brands Company (HSH) Jul-13 39 calls, 23k Hillshire Brands Company (HSH) Jul-13 34 calls, 22k J C Penney Company Inc (JCP) Apr-13 17 puts, 20k Electronic Arts Inc (EA) Jun-13 19 calls and 20k Gerdau SA (GGB) Sep-13 9 calls.
In Sears (SHLD), we have seen an investor steadily accumulating the Jan ’15 60/70 call spreads, buying 90k in the past month which includes 10k that were bought yesterday for $2.50.
In animal health company Zoetis (ZTS), there was a buyer of almost 3,000 July 30 calls which was roughly 16x normal volume. ZTS went public on January 31 at $26 per share. In the next few weeks, Wall Street analysts will initiate coverage and most likely with favorable ratings.
Our market sentiment indicator as of yesterday continues to be in the low 80% range which is bullish. Market dips should be bought.