Unusual Options Activity

1. Peabody Energy (BTU)- There was a rollout from 24,000+ Jan 2016 $1.50 puts ($0.64-$0.65 credit) into 40,000+ Jan 2016 $1 puts ($0.34 debit). Earnings out on July 28th. Yesterday, fellow coal miner, Arch Coal, announced a 1 for 10 reverse stock split (not a good sign). BTU, a stock trading at $1 and change, is expected to lose $2 per share this year.
2. Energy Transfer Equity (ETE)- 5,000 Jan 2016 $65 calls were bought for $3.10, against open interest of 6,644 contracts. There was sizable buying in these yesterday too. ETE wants to acquire Williams Companies (current offer is $48B), but they aren’t going for it yet.
3. Lexmark International (LXK)- There was a rollout from 2,500 Aug $46 puts ($8.50 credit) into 2,500 Aug $41 puts ($3.80-$3.90 debit). They paid $1.35 for the Aug $46 puts yesterday. Today, they issued Q3 guidance of $0.51-$0.61 vs the $0.91 estimate. Also, the company announced they will layoff 500 employees.
4. Health Care Select Sector SPDR Fund (XLV)- 11,000+ Sep $77 puts were purchased for $1.89. The healthcare ETF could retest the 50-day EMA (around $75) in the near-term. Johnson & Johnson, Pfizer, Gilead Sciences, and Merck account for more than 28% of the weighting.
5. YPF SA (YPF)- 2,500 Dec $25 calls were purchased for $2.75-$2.80, against open interest of 5,529 contracts. 5,000 were bought on July 14th for $3.60. On July 14th, Credit Suisse upgraded the stock to outperform from neutral with a $32 price target. Earnings estimates have been falling for the Argentinian oil & gas company, but the stock trades at a P/E ratio of 11.14x (2015 estimates), price to sales ratio of 0.60x, and a price to book ratio of 1.14x.

BTU ETE LXK unusual options activity XLV YPF