2014-08-27 Smart Money Report (HLF) (TRW)
Smart Money Report
- BAC- The Nov $16/$17 bull risk reversal was put on 10,000 times for a $0.20 credit. Volume was below the open interest in both options. There were nearly 20,000 Oct 18 $17 calls bought yesterday.
- GPS- 4,906 Mar 2015 $48 calls were sold for $2.15 each, against open interest of 8 contracts. Given the rise from $39 to $46 in Gap shares over the last month, selling these calls against a long stock position allows you stay in the trade with upside to effectively $50.15.
- HLF- More than 4,400 Sep 20 $55 calls have traded with the majority being purchased for $1.07-$1.10 each, against open interest of 2,006 contracts. The call to put ratio in Herbalife is 3:1. Call activity is over 2x the average daily volume.
- TRW- 2,500 Jan 2015 $100 calls were bought for $4.10-$4.25 each, against open interest of 731 contracts. ZF Friedrichshafen AG was reported in talks to buy TRW Automotive for about $12B ($105 per share).
- XRT- 5,000 Sep 5 weekly $90 calls were purchased for $0.44-$0.50 each, against open interest of 42 contracts. The retail ETF is set to close above the July weekly closing high of $88.65 this week. Options activity remains bullish in the SPDR S&P Retail Index ETF components like Burlington Stores.
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