Wednesday’s total option volume of 16.7 million contracts resulted in net open interest growth of 2.02 million calls and 2.28 million puts. Green Mountain Coffee Roasters (GMCR), Bank of America Corporation (BAC), United Continental Holdings (UAL) and Electronic Arts (EA) saw the greatest growth. Top five new positions opened include 20k Triquint Semiconductor (TQNT) Feb-13 4 puts, 19k Electronic Arts Inc (EA) Mar-13 17 calls, 17k Delta Air Lines (DAL) Jan-14 12 puts, 17k Suncor Energy (SU) Mar-13 34 calls and 16k Cisco Systems (CSCO) Feb-13 20 puts.
In GNC Holdings (GNC), got long upside vol buying to open 3,000 GNC Mar 35 calls, 2,000 Feb 37.50 calls and 1,000 Feb 35 calls. With the stock at $35.60, these market participants are looking for a near term move off of earnings which are scheduled for Feb. 11.
In Cloud Peak Energy (CLD), 20 times normal volume traded in their options. Market participants bought to open 2,000 CLD Mar 17.50 calls with the stock at $16.79. Traders are looking for a bounce from 6-month lows when they report Feb. 13.
And in Questar (STR), where options volume was 3.6 times normal, traders bought to open nearly 7K STR Mar 24 calls with the stock at $23.15. The company is scheduled to report Feb.20.
Yesterday, two of the names we highlighted, New York Times (NYT) and Atmel (ATML), had unusual volume of earnings. In both names, there was significant bullish flow right before their earnings print. NYT ripped higher and ATML fell of cliff. These are just a couple examples how playing earnings can be hit or miss. We have found when the stock has been beaten up ahead of earnings and there is call buying, the pop is enough greater than a stock that has acted well into the earnings print.