2015-01-07 Unusual Options Activity (INFN) (SE)

Posted on January 7th, by Mitchell Warren in Free Articles, Options Risk Management, Smart Money Report, Unusual Options Activity. Comments Off on 2015-01-07 Unusual Options Activity (INFN) (SE)

Unusual Options Activity

  1. CLNY- 2,000 Feb $25 puts were sold for $1.20 each, against no previous open interest (typically trades just 36 puts per day). He/she is making a bet that Colony Financial shares are able to breakout above the $24.50 resistance level and end above $25 on February options expiration (breakeven down at $23.80). The real estate and investment company trades at a reasonable forward P/E ratio of 13.40x on revenue that will more than double in a two year stretch (end of 2013 through 2015).
  2. CYH- Someone rolled out 2,500 Jan 2015 $48 calls ($6.37-$6.38 credit) into 4,000 Mar $55 calls ($3.56 debit). Volume was above the open interest in the Mar $55 calls. Call activity is more than 10x the average daily volume. Shares of Community Health Systems just successfully tested support at the 50-day EMA for the second time in the last month, setting up for a retest of the $56-$58 resistance level. On January 6th, (CYH) announced that they will be participating at the JPMorgan Chase Healthcare Conference (1/12-1/15).
  3. INFN- A likely rollout from 5,000+ Apr $15 calls ($0.80 credit) into 5,000+ Apr $13 calls ($1.70 debit). Volume was above the open interest in the Apr $13 calls. He/she wants to stay long Infinera after the recent pullback, but wants a higher delta on their trade (call activity is 6x the average). On January 6th, Goldman Sachs downgraded the stock to buy from conviction buy.
  4. SE- The Mar $30/$38 bull risk reversal was put on 10,000 times for a $0.02 credit. Volume was above the open interest in both options. This trade involves buying the Mar $38 calls and selling the Mar $30 puts (margin required). Options activity is 10x the average daily volume with earnings due out on February 2nd. Since the summer, shares of Spectra Energy have fallen 20%+ due to the bear market in energy prices.
  5. SNSS- There was massive call buying in the Feb and Apr $2.50 calls (12,000+ total traded). Over 14,000 calls traded vs the total call open interest of 15,749 contracts to put today’s action into perspective. Implied volatility soared 26.2% to 125.09. BTIG put out a note on Monday saying that Sunesis Pharmaceuticals will breakeven by 2017 and believes their vosaroxin has a higher chance of approval then most are predicting in the US and EU. BTIG has a buy rating and a $5.50 price target. Looking at the daily chart, pullbacks to the middle Bollinger Band (20-day SMA) have been buying opportunities since November.
  6. VLO- More than 13,000 Jan 17 2015 $48 puts have traded today with the majority being purchased for $1.10-$1.16 each, against open interest of 379 contracts. In December Valero Energy shares put in a higher low at the 200-day SMA and are now poised to retest the lower to mid $40’s soon. On January 6th, JPMorgan Chase kept their overweight rating, but lowered the price target to $55 from $57. 2015 EPS estimates have fallen nearly $0.80 in the last three months to $5.32 per share (revenue expected to fall 17%).

1 On 1 Options Mentoring: Learn more about my 1 on 1 equity/options mentoring courses that help can you improve your trading odds and risk management skills.

More Of My Commentary/Articles: Check out my contributor content for TraderPlanet, Seeking Alpha, and TheStreet.com.

Social Media: Follow me on Twitter and StockTwits!

Two latest articles

Nike’s International And Women’s Segments Are Fueling The Growth Story

Payroll Strength And Healthcare Reform Services Helped Paychex Deliver In Q2

Comments are closed.

Wordpress SEO Plugin by SEOPressor