2015-04-08 Unusual Options Activity (AIG) (DO)

Posted on April 8th, by Mitchell Warren in Free Articles, Options Risk Management, Smart Money Report, Unusual Options Activity. Comments Off on 2015-04-08 Unusual Options Activity (AIG) (DO)

Unusual Options Activity

  1. American International Group (AIG)- A likely rollout from 42,985 Jan 2016 $60 calls ($1.80 credit) into 42,985 Jan 2017 $60 calls ($4.50 debit). Call activity was over 7x the average daily volume. The insurer trades at a P/E ratio of 11.26x (2015 estimates), price to sales ratio of 1.19x, and a price to book ratio of 0.71x.
  2. ARM Holdings (ARMH)- Over 2,000 May $55 calls were bought for $0.58-$1.10. The Apr $55 calls also saw sizable buying. Call activity was nearly 6x the average daily volume. Goldman Sachs reiterated their conviction buy rating on March 31st.
  3. Diamond Offshore Drilling (DO)- A rollout from 6,300 Apr $30 puts ($1.39 credit) into 6,300 May $22.50/$27.50 put spreads ($1.09 debit). Earnings are due out on May 4th.
  4. Gilead Sciences (GILD)- 10,000 May 15 $105 calls were purchased for $1.69-$1.79, against open interest of 23,926 contracts. Citigroup put out a note recently expecting a better than expected Q1 (out on April 21st) because of Hep C drug sales.
  5. Yahoo! (YHOO)- 5,000 Apr 10 weekly $45 calls were bought for $0.18 and 4,432 Apr 10 weekly $44.50 calls were bought for $0.40 (call to put ratio was 4.5:1). The stock has room to run up to the near-term resistance level at $46.
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