Unusual Options Activity Report
Here’s a quick look at 5 stocks showing unusual options activity with some color around the trading setups and recent news about the companies.
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).
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 on AMD to $1.50 from $2 citing market share loss, burning through their cash, and weak PC demand.
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.
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 (the trade is profitable between that range). Time to see how PayPal (PYPL) trades by itself.
Citigroup (C) 10,000+ Sep $60 calls were bought for $1.15-$1.23, against open interest of 16,355 contracts. Citigroup (C) 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 of C broke out above the $57 level, which sets up for a move to $60+ later in the year. click chart to enlarge
Thanks for reading.
Read more from Mitchell on his options blog.
Twitter: @MitchellKWarren
No position in any of the securities mentioned at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
