Friday’s total option volume of 15.2 million contracts resulted in net open interest growth of 2.67 million calls and 2.50 million puts. Bank of America Corporation (BAC), Dow Chemical Co (DOW), American International Group Inc Corp (AIG) and Dell Inc (DELL) saw the greatest growth. Top five new positions opened include 59k Dell Inc (DELL) Jan-15 12 calls, 50k Dow Chemical Co (DOW) Jan-14 40 calls, 50k Dow Chemical Co (DOW) Jan-14 45 calls, 26k Nokia Corp (NOK) 3/1 weekly 4 calls and 21k American International Group Inc Corp (AIG) Aug-13 34 puts.
In Intersil Corp (ISIL), there was an opening buyer of 1,500 Apr 13 calls which was 12x normal volume. Last week, the company announced restructuring initiatives which is expected to reduce annual operating expenses by $30 million. The company reports earnings on April 24, after the April expiration. The 13 strike implies at least a 50% move in the underlying stock.
On Friday, there was a Dow Chemical (DOW) Jan 40 – 45 call spread trade on the stock for 37 cents. The Jan 40 and 45 calls on DOW are already the largest blocks of open interest in the chemicals company and today’s action probably adds to positions opened in late-January. If so, the spread trading seems to be expressing confidence that the stock will be trading at significantly higher levels by mid-Jan 2014.
Saks (SKS) reports earnings tomorrow morning. On Friday, there was a buyer of 5,000 Aug 12 calls. SKS closed on Friday at $11.25.