Wednesday’s equity option volume of 16 million contracts was 7% above the year-to-date average. Open interest growth favored the puts with 2.66 million puts opening vs. 2.26 million calls. Bank of America (BAC), Facebook (FB), Apple (AAPL) and Intel (INTC) saw the greatest growth. In BAC, market participants bought to open weekly 12 call/11.50 put strangles and Apr 12 and May 13 calls. In FB, the trading was two-way ahead of the company’s Android event today, however the largest trade was a buyer of Jan (2014) 20 puts.
In Zynga (ZNGA) 15% of total open interest traded. With the stock up 16% on news of real money gaming in the UK, traders were looking for the social gaming company to extend the rally. The volume was three times the normal and had a bullish bias in the Apr 3.5 calls, the May 3.5 calls and the weekly 3.5 calls.
In Rock Tenn (RKT), there was a buyer of 3.000 May 95 calls. The volume was 15 times normal. The stock is up 900% in the past eight years and added a fresh all-time high last week. As an alternative to AMZN, UPS and FEDX to play internet retail, this packaging company sells corrugated packaging products. Investors are looking for more upside.
In iGate (IGTE) there was a buyer of Apr 20 calls with the stock at $18.24. This volume was 125 times normal.
In Central European Media Enterprises (CETV) there was an opening buyer of 4,000 Jul 7.50 calls with the stock at 3.87. The stock hit a 52-week low yesterday, the volume was 30 times the usual options volume and the ATM IV (at-the-money implied vol) hit a 52-week high. The stock needs to double for these calls to work.
And lastly in Frontier Communications (FTR), there was a bearish bias in trading as market participants bought to open 7,000 Nov 4 puts (at-the-money). The volume was 10 times normal.