Wednesday’s total option volume of 12.5 million contracts resulted in net open interest growth of 574k calls and 617k puts. Apple Inc (AAPL), Nokia Corp (NOK), US Airways Group Inc (LCC) and Micron Technology Inc (MU) saw the greatest growth. Top five new positions opened include 26k General Electric Company (GE) Jan-15 30 calls, 24k Cisco Systems Inc (CSCO) Apr-13 20 puts, 16k Bank of America Corporation (BAC) Jun-13 15 puts, 13k Nokia Corp (NOK) Jul-13 4 calls and 12k Noble Energy Inc (NBL) Jan-14 130 calls.
We will be publishing a book later this year through McGraw Hill (MHP) on tactical investing. Yesterday, there was a buyer of 15,000 May 50 MHP calls. On February 4, MHP broke down on the possibility of a Department of Justice lawsuit. The stock fell from $58 to $42. At a Piper Jaffray investment conference yesterday, MHP management said they were optimistic about their chances of successfully defending the company in a lawsuit. The bullish options flow was 2x normal.
E Trade Financial (ETFC) touched a 52 week high yesterday. Possibly as a long-term hedge, there was a buyer of 20,000 ETFC Jan 2015 7 strike puts. The on-line brokerage firms including TD Ameritrade and Charles Schwab have been showing high positive relative strength lately.
J C Penny (JCP) call volume spiked yesterday on a 4way that traded on the CBOE. The investor bought 2500 May 17 calls for $1.02 and bought 5000 Jan 25 calls for 0.85 against a sale of 10k July 20 calls 0.79 and 2500 May 20 calls for 42 cents. Recall earnings in late Feb took shares from the 22 range to as low as $14.50ish before a recent slight recovery. JCP was upgraded by BTIG this morning.