Equity option volume jumped to 18.5 million contracts on Monday versus the December average of 13.5m and the yearly average of 14.6m. Apple Inc (AAPL), Bank of America (BAC), Las Vegas Sands (LVS), Paychex (PAYX) and Citibank (C) were the big traders. PAYX volume was 80 times normal ahead of earnings after the close tomorrow and ex-div today. LVS trades ex-div today, too. Among the largest volume leaders, Hertz (HTZ), Clearwire (CLWR) and Sandbridge Energy (SD) were the unusual members. Unfortunately, these large options trades crossed mid-market, so no clear direction was detected.
For the second consecutive day, Taiwan Semiconductor Manufacturing (TSM) was the most unusual trader yesterday relative to open interest. Market participants bought over 8K Dec 17.50 calls with the stock at 16.94. These front month option trades with expiration this Friday are quite unusual. The company is not scheduled to report earnings until January 16. In Orexigen Therapeuticss (OREX), investors bought to open 2K Jan 5 calls with the stock at $5.24. These in-the-money trades are looking for further upside – the stock closed at $5.44.