Unusual Options Activity: DAL, P, X, CVS, And More

unusual options activityIt’s Sunday night so it’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 (or who is making them), I believe that it’s important to be aware of notable options activity as another 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

Monday

Avon Products (AVP) – 9,000 Aug 21 $7 puts were bought for $0.90-$0.95. The next day another 4,000+ bought for $1.00-$1.08. There were about 20,000 Aug 21 $6 puts bought on June 26th. Shares of Avon (AVP) are heading lower, but valuations still aren’t at attractive levels given the string of quarterly EPS disappointments.

CVS Health (CVS) – 6,000 Aug 7 weekly $102 puts were sold for $1.13. Big put sellers have been targeting this stock for nearly a year now. Last month, CVS announced they are acquiring 1,600 of Target’s pharmacy and clinic businesses for $1.9B.

Tupperware Brands (TUP) – 3,000 Aug $65 puts were purchased for $2.39-$2.60. Put activity was 15x the average daily volume. Earnings are due out on July 22nd (shares have dropped on 6 out of the last 7 reports).

Union Pacific (UNP) – The 1×2 Aug 7 weekly $94/$90 ratio put spread was put on 4,800 times for a $0.14 debit. This trade can have a maximum gain on a close at $90 on August 7th. Earnings are due out on July 23rd. The multi-month downtrend is still intact. Major support is around the $90 level.

 

Tuesday

Advanced Micro Devices (AMD) – There was a rollout from 180,600 July 17 $2.50 puts ($0.24 credit) into 180,600 Oct $2 puts ($0.16 debit). AMD recently denied reports that they are looking to breakup the company. However, losses are expected to be $0.24 per share in EPS this year.

Delta Air Lines (DAL) – There was a rollout from 20,000+ July 17 $45 calls ($0.34 credit) into 20,000+ Aug 21 $45 calls ($0.96 debit). Several airlines saw similar rolls during the week to extend their bullish bets on the sector even with the DOJ looking into price fixing. On July 2nd, JPMorgan Chase reiterated their overweight rating on Delta Airlines (DAL) and a $63.50 price target.

United States Steel (X) – There was a rollout from 7,500 Jan 2016 $20 puts ($2.54 credit) into 7,500 Jan 2017 $18 puts ($3.47 debit). Shares of X are down for the 7th straight day, resulting in a break down below the January lows.

 

Wednesday

Microchip Technology (MCHP) – 4,000 Aug $48 puts were purchased for $2.75-$2.90. Put activity was 8x the average daily volume. Using the historical TTM P/E ratio of 28.60x (currently 28.03x) it isn’t exactly expensive, but if the $46 support level doesn’t hold it could setup for a correction to $42.

 

Thursday

Juniper Networks (JNPR) – There was a rollout from 7,100 July 2 weekly $27 puts ($0.78 credit) into 7,100 July 10 weekly $26.50 puts ($0.56 debit). The $27 puts were initially bought on June 15th for $0.74-$0.75. Shares could see a gap fill to $24-$25 in the coming weeks. On June 1st, MKM Partners downgraded the stock to sell from neutral with a $22 price target. They cited valuations and the unlikelihood of them being acquired.

Pandora Media (P) – 9,000 Sep $15 puts were purchased for $1.26-$1.33. Put activity was 3x the average daily volume. Pandora’s earnings are due out on July 23rd (shares of P have fallen after earnings on 5 out of the last 6 reports). Competition from the likes of Apple, Spotify, and others are weighing on the company’s performance.

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.

 

Sign up for our FREE newsletter
and receive our best trading ideas and research