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%).

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CLNY CYH INFN SE SNSS unusual options activity VLO