Wednesday’s total option volume of 17.6 million contracts resulted in net open interest growth of 2.21 million calls and 2.67 million puts. Gulf Coast Ultra Deep Royalty Trust (GULTU), Pfizer Inc (PFE), Facebook Inc (FB) and Williams Companies Inc (WMB) saw the greatest growth. Top five new positions opened include 40k Intel Corporation (INTC) Sep-13 22 puts, 38k Pfizer Inc (PFE) Jul-13 35 calls, 31k Pfizer Inc (PFE) Jul-13 35 puts, 31k Groupon Inc (GRPN) Jul-13 6 puts and 27k Williams Companies Inc (WMB) Aug-13 36 calls.
From the intraday high to the intraday low on the S&P 500, stocks have pulled back by nearly 5%. High relative strength stocks have performed worse than the S&P 500 dropping by 6.5% through yesterday. The selling began with the Fed’s suggestion of possible QE tapering and has most impacted high yield stocks. Many of the high yield stocks had been the highest relative strength stocks as well. Technology stocks have held up relative well and the overall sell-off appears to be orderly so far. With the market in a short-term oversold condition and expectations for a good jobs number tomorrow lowered by the weaker-than-expected ADP report, the odds of a market bounce on the jobs report tomorrow are rising.
In Lexmark International (LXK), which has shown good relative strength over the past week, there was a buyer of 2000 Jan 30 calls. With the stock trading at roughly $30.70, it appears the options buyer has high conviction in the bullish trade.