The equal weighted S&P 500 shown as the Rydex ETF (RSP) has been trading up along its 75-day moving average. Analysts on Wall Street are becoming more bullish today on the idea that putting the presidential election behind us will reduce uncertainty whoever wins. If the market rallies tomorrow, it is likely the start of a rally that carries into year-end. Of the 12 top trades today from our market screen, all 12 were involved call buying.
Yesterday, there was an opening buyer of 10,000 May 4.5 Hovnanian Enterprises (HOV) calls which is the equivalent of buying 630,000 deltas. The stock has traded higher recently on positive comments from the company and improving and on news of a land banking arrangement with GSO Capital. In Rockwell Collins (COL), an opening investor bought approximately 1,300 Jan 55 calls. Typically, fewer than 200 COL options contracts trade per day. In Lockheed Martin (LMT), investors bought 13,000 January 85 puts paying up to $1.00. In the weird trade category, there was a buyer of 5,000 Loral Space & Communications, Inc. (LORL) 35 calls. LORL is trading at $80/share. Dolby Labs (DLB) reports after the market close on Nov 8. Yesterday, there was a buyer of 5,500 Dec 40 calls. In short sale restricted Walter Investment Management (WAC), there was an opening buyer of 5,000 Dec 45 calls in front of earnings to be reported on Nov 8 before market open.