Monday’s total option volume of 15.2 million contracts resulted in net open interest growth of 2.77 million calls and 3.05 million puts. Gilead Sciences Inc (GILD), Facebook Inc (FB), Yahoo Inc (YHOO) and Apple Inc (AAPL) saw the greatest growth. Top five new positions opened include 51k Facebook Inc (FB) Feb-13 35 calls, 23k H and R Block Inc (HRB) Apr-13 25 calls, 21k H and R Block Inc (HRB) Apr-13 20 puts, 20k Gilead Sciences Inc (GILD) Jan-14 30 puts and 18k Bank of America Corporation (BAC) Apr-13 12 calls.
In Republic Services (RSG), 34x the normal volume traded yesterday with almost all of the activity in the July 35 calls where there was an opening buyer of 3500 contracts. The stock is at a 52 week high. Credit Suisse raised its price targets on both waste management companies; RSG and Waste Management (WM) yesterday. RSG reports earnings on Feb 7.
In Laboratory Corp of America (LH), 30x the normal volume traded yesterday with nearly 7,000 Mar 100 calls bought opening. This morning, Oppenheimer initiated coverage saying LH is the most efficient testing provider and is best positioned to absorb the mandated reimbursement cuts by the government. The company reports earnings on Feb 8.
We are looking to add long exposure on market pull-backs. It appears that we may have an opportunity today to add a position on market weakness.