Wednesday’s total option volume of 16.1 million contracts resulted in net open interest growth of 1.72 million calls and 1.66 million puts. Ford Motor Company (F), Bank of America Corporation (BAC), American International Group Inc Corp (AIG) and General Electric Company (GE) saw the greatest growth. Top five new positions opened include 74k Ford Motor Company (F) Jan-13 14 calls, 28k Sprint Nextel Corporation (S) Jan-13 5 puts, 26k Ford Motor Company (F) Jan-13 12.5 calls, 21k Bank of America Corporation (BAC) Jan-13 10 puts and 20k American International Group Inc Corp (AIG) May-13 40 calls. The options activity in Ford (F) was 2x normal and was a bull call spread with the 12.5 strike bought and the 14 strike sold in a 1:3 ratio.
From the floor of the CBOE yesterday, there was a buyer of 12K Keycorp (KEY) Jan 2014 10 strike calls. The stock is trading near $8 per share. In Micros Systems (MCRS), we are seeing increasing interest in the Dec 40 puts. The volume of 4400 Dec 40 puts yesterday was 118x normal. In Quicksilver Inc. (ZQK), there was a buyer of 7800 May 5 calls. The company is scheduled to report earnings after the close today.
In pipeline bellwether Williams Companies Inc. (WMB), a closing investor bought 27,000 December 30 (.26d) puts for $0.29, equivalent to selling approximately 700,000 deltas. Over the past few months we have seen this investor previously rolling their short put position, but yesterday it was interesting to note that they closed the short volatility position outright, eliminating their near-term downside risk of having to buy stock for $30. We saw the same situation in oil company Marathon Oil (MRO) three days ago with an investor buying back their Dec puts rather than rolling them.