Unusual Options Activity: CHK, COP, HLT, TWTR, And More

unusual options activityIt’s time to review several stocks that had unusual options activity over the last week. Although traders can never be sure why these trades take place (and who’s making them), I believe it’s important to be aware of notable options activity as an indicator for directional bias.

Here’s a weekly recap of 10 stocks that had unusual options activity and what, if any, significance these trades may have.

Unusual Options Activity: 10 Stocks With Notable Trades

Wednesday

HollyFrontier (HFC) – 11,000 Sep $50 calls were purchased for $0.95-$1.00. On July 14th, 20,000 Sep $49 calls were bought for $1.00. HollyFrontier earnings are due out on August 5th. On July 24th, Macquarie initiated HLF with an outperform rating and a $52 price target. HFC trades at a P/E ratio of 11x (2015 estimates), price to sales ratio of 0.50x, and a price to book ratio of 1.61x.

Sprouts Farmers Market (SFM) – 6,000 Sep $25 puts were bought for $1.15-$1.30. Put activity was 14x the average daily volume. SFM earnings are due out on August 6th (dropped 9%+ last quarter). Short interest is nearly 9% of the float.

SPDR S&P Metals & Mining ETF (XME) – There was a rollout from 4,000 Aug 21 $21 puts ($1.17 credit) into 4,000 Aug 21 $20 puts ($0.67 debit). The Aug 21 $21 puts were bought for $0.48 on July 17th. The metals & mining ETF (XME) continues to make new lows, down for the 7th consecutive week. Newmont Mining, Royal Gold, and Steel Dynamics are the three largest holdings.

 

Thursday

Blackstone Group (BX) – The Aug 28 weekly $38/$36 1×2 ratio put spread was put on 5,000 times for a $0.08 debit. Also, there was a rollout from 17,400 Sep 18 $39 puts ($1.02 credit) into 17,400 Dec $40 puts ($2.72 debit). Shares of Blackstone Group (BX) put in multi-month lows on heavy volume on Friday.

Chesapeake Energy (CHK) – There was a rollout from 11,700 Oct $11 puts ($2.69 credit) into 24,500 Oct $8 puts ($1.00 debit). Also, 26,000 Jan 2016 $7 puts were bought for $1.30. Put activity on CHK was 6x the average daily volume. Falling oil and natural gas prices are hurting margins and the company is on pace to see revenue cut in half compared to 2014 ($21B to $10.4B).

Twitter (TWTR) – 10,000 Sep $45 calls were purchased for $0.67-$0.72, against open interest of 10,244 contracts. Twitter (TWTR) earnings are due out on July 28th. Jack Dorsey became the interim CEO after Dick Costolo stepped down at the end of June. TWTR is at a crossroads and continues to generate a lot of buzz.

 

Friday

ConocoPhillips (COP) – Roughly 6,000 July 31 weekly $52.50 puts were purchased for $1.00-$1.10. Implied volatility spiked 27.8% to 32.51. ConocoPhillips earnings are due out on July 30th.

EP Energy (EPE) – There was a rollout from 13,500 Aug $10 puts ($1.85 credit) into 15,000 Aug $9 puts ($1.25 debit). EPE earnings are due out on July 29th. Shares bottomed at $6.92 in December.

Hilton Worldwide (HLT) – 2,500 Aug $27 calls were purchased for $0.80. Over 25,000 remain in open interest in the Jan 2016 $35 calls. We could see more deals from Hilton Worldwide (HLT) later this year. Back in October, Hilton agreed to sell the legendary Waldorf Astoria New York for $1.95B to Anbang Insurance Group (completed in February).

NVIDIA (NVDA) – 8,829 Aug 7 weekly $19.50 puts were bought for $0.79. Nvidia earnings are due out on August 6th. Semiconductors like NVDA have braced for a weak 2015 (soft demand and weak margins) and earnings estimates continue to fall.

Thanks for reading and have a great week!

 

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.

 

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