I’m back with my Sunday night review of several stocks that had unusual options activity during the prior week and what that may mean going forward. Although traders can never really be sure why these trades are taking place and who’s making them, I believe it’s important to be aware of notable options activity.
Here’s my weekly recap 10 stocks that saw unusual options activity and what, if any, significance these trades may have.
Unusual Options Activity: 10 Stocks With Notable Trades
GNC Holdings (GNC)- 7,000 Jan 2016 $47.50 calls were purchased for $3.30. 7,500 Jan 2017 $47.50 calls were bought on May 1st. GNC offered weak Q1 and FY15 guidance last week (and the stock dropped $6). This could mean an activist steps in or they are ripe for M&A activity. On the weekly chart, shares held on the test of the $43 support level.
SouFun Holdings (SFUN)- Another 33,000 Nov $6 puts were sold for $0.40, against open interest of 33,656 contracts. There was large selling in these on April 23rd and 30th. Put selling is often overlooked, but can be a good tell on a stock that has upside potential and at least limited downside risk (66,000+ in open interest that are sold to open).
Advanced Auto Parts (AAP)- A rollout from 3,500 May $150 puts ($5.10 credit) into 3,500 June $135/$145 put spreads ($3.90 debit). Earnings are due out on May 21st (shares dropped on the last two reports). The May $150 puts were initially bought for $4.00-$4.10 on April 23rd.
Jack in the Box (JACK)- 1,300 May $90 calls were purchased for $2.00-$2.15. Earnings are due out on May 13th (shares have moved higher on 7 straight reports).
Advanced Micro Devices (AMD)- A rollout from 15,000 May 15 $2.50 puts ($0.21 credit) into 15,000 Oct $2.50 puts ($0.47 debit). On April 16th, AMD reported weak Q1 EPS, sales numbers and issued weak Q2 guidance. Bernstein has an underperform rating and a $1.50 price target.
Praxair (PX)- 1,000 June $120 calls were bought for $2.65. Large open interest remains in the July $130 and $140 calls from buying in recent months.
Activision (ATVI)- A rollout from 2,500 May 15 $22 calls ($3.00 credit) into 4,000 June 19 $24 calls ($1.38 debit). Volume was below the open interest in both options. The Q1 top and bottom line beat from this week is lifting the stock above the $24 resistance level. Keep an eye on ATVI.
ConocoPhillips (COP)- A rollout from 17,000+ May 15 $70 calls ($0.02 credit) into 17,000+ June 19 $72.50 calls ($0.32 debit). This trade is likely done by the same trader who did the CVX call purchase (happened just 4 minutes apart).
Chevron (CVX)- 11,000+ June 19 $115 calls were bought for $0.46, against open interest of 9,896 contracts. The stock printed a bullish hammer candlestick, snapping a 6-day losing streak right at the 100-day SMA.
Take-Two Interactive (TTWO)- 6,000+ June $23 puts were bought for $0.54-$0.60. Q4 earnings are due out on May 18th (TTWO shares have dropped after earnings on 5 out of the last 6 reports). Competitors like EA and ATVI have been performing better as stocks and as companies (both had great reports this week).
Thanks for reading and have a great week!
Follow Mitchell on 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.