Tuesday, January 21, 2025
The collapse in cryptocurrencies (brought about by the insolvency of FTX) spilled over into equities markets last week. Bears are betting that Coinbase (COIN) is going to succumb to the downside pressure as well. While the FTX news was being digested by the market, traders purchased a large amount of puts in COIN, possibly expecting […]
It’s earnings season, so there’s been plenty of options action in single stock names. Recently, a strategist purchased what appears to be a very bullish call spread in Disney (DIS). The call spread – buying one call and selling another at a higher price in the same expiration period – doesn’t expire until right after […]
Hedging against a big stock selloff can be expensive when using options. One way to reduce the cost is by using options spreads. A more complex spread that can be useful in this situation is a put butterfly. A strategist bought over 20,000 put butterflies in SPDR S&P 500 ETF (SPY) that expire at the […]
With the bond market in focus this year, there’s been plenty of options action in iShares 20+ Year Treasury Bond ETF (TLT). The long-term bond fund is the most active of the treasury bond ETFs, trading around 180,000 options per day on average. A large trader or fund placed a very interesting spread trade last […]
One way to trade a potential market rebound without the risk of buying stocks outright is by using covered calls. A covered call will cap the upside of a stock or index, but provides cash flow and a bit of downside cushion. Recently, a trader placed a 20,000-lot covered call trade using iShares Russell 2000 […]
A very unusual options block trade hit the tape last week in Lithia Motors (LAD). The automobile dealership company typically trades about 200 options a day on average. However, a trader recently executed a 9,500-lot trade of November covered calls in LAD options. The trade could suggest there is both a floor and a ceiling […]
Stocks finally halted their selloff at the midpoint of last week, with the major indices all up at least 2% on the day. On that day, the iShares Russell 2000 ETF (IWM) was up over 3%, marking an outperformance from small cap stocks. A trader appears to have used the opportunity to place a 10,000-lot […]
Volatility is back to high levels after the Fed sounded increasingly hawkish after last week’s FOMC meeting. At least one volatility ETF, the ProShares VIX Short-Term Futures ETF (VIXY), saw an unusual increase in options volume during the period. However, it seems there was a fair amount of put buying, suggesting traders believe volatility may […]
The steel industry showed up on the unusual options volume radar last week, with both United States Steel (X) and Nucor (NUE) near the top of the list. NUE preannounced much lower than expected earnings, and X was expected to follow suit. At least some traders were snatching up blocks of short-term X puts, possibly […]
On a slow day for options trading, Globalstar (GSAT) traded over 200,000 contracts, or 31x its normal volume. The satellite communications company experienced volatile trade as investors awaited news of a deal with Apple (AAPL). GSAT will be providing satellite communication capabilities with some new AAPL products. At least one of the largest GSAT block […]
