Tuesday’s total option volume of 15.1 million contracts resulted in net open interest growth of 3.21 million calls and 2.98 million puts. Blackstone Group LP (BX), Facebook Inc (FB), Bank of America Corporation (BAC) and Apple Inc (AAPL) saw the greatest growth. Top five new positions opened include 115k Blackstone Group LP (BX) Jan-15 30 calls, 46k H J Heinz Company (HNZ) Jun-13 75 calls, 41k CBS Corp (CBS) Jun-13 50 calls, 40k Tesoro Corporation (TSO) Apr-13 65 calls and 20k Avon Products Inc (AVP) Jul-13 24 calls.
In Sears Holding Corp (SHLD), investors continued to position themselves for the long-term, buying 10k Jan’15 60/70 call spreads for $2.55. In early January, this same call spread was purchased 70,000x. In a time of intense M&A activity, this options activity suggests Sears may be an acquisition target.
In oil stock British Petroleum (BP), the focus was near term as an opening investor bought 5k Feb23 ‘weekly’ 42 (.30d) calls for $0.22. The seemingly bullish trading came directly after headlines that the judge approved Transocean’s (RIG) settlement with the Department of Justice in the civil suit.
The recent trend of buying protection via downside SPY March puts continued yesterday in a variety of March expirations. By mid-morning, SPY investors had bought at least 10k March2 weekly 150 puts for $0.43, 25k March 148 (.21d) puts for $0.64, and bought 17k March qtrly 145 puts vs. selling 22k March qtrly 154 calls in a ratio risk reversal. In the VIX (S&P Volatility Index), investors were buying insurance against a down equity move. For the past week or so, investors have focused on buying the March 18 and 22 calls, about 100k times, including ~15k yesterday for $0.68.