Unusual Options Activity

1. AK Steel (AKS)- There was a rollout from 16,431 Sep $3 puts ($0.47 credit) into 32,177 Jan 2016 $2 puts ($0.24 debit). Steel prices are hitting multi-year lows and EPS estimates continue to be revised lower because of it (-$0.47 to -$0.90 for 2015 in just three months).
2. Advanced Micro Devices (AMD)- There was a rollout from 10,029 Oct $2 puts ($0.32 credit) into 20,058 Jan 2016 $1.50 puts ($0.16 debit). On July 17th, Citigroup lowered their price target to $1.50 from $2 citing market share loss, burning through their cash, and weak PC demand.
3. Baxter International (BAX)- 15,000+ Aug 21 $38.50 calls were purchased for $0.48. Earnings are due out on July 29th. They spun off Baxalta, a developer new treatments for people with orphan diseases and underserved conditions, last month.
4. Citigroup (C)- 10,000+ Sep $60 calls were bought for $1.15-$1.23, against open interest of 16,355 contracts. The bank trades at a P/E ratio of 9.91x (2016 estimates), price to sales ratio of 2.56x, and a price to book ratio of 0.88x. Last week, shares broke out above the $57 level, which sets up for a move to $60+ later in the year.

1. PayPal (PYPL)- The Aug $40 straddle was put on 3,000 times for a $4.00 credit. He/she thinks the recent EBAY spinoff won’t move above $44 or below $36 by August options expiration (trade is profitable between that range).

AKS AMD BAX C PYPL unusual options activity