Unusual Options Activity: KO, XLF, QCOM, And More

options trading 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 (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 my weekly recap of 10 stocks that saw unusual options activity and what, if any, significance these trades may have.

Unusual Options Activity: 10 Stocks With Notable Trades

Monday

VeriFone Systems (PAY)- Over 4,000 June $39 calls were bought for $0.54-$0.65, against open interest of 7,339 contracts (open interest rose to above 11,000 Tuesday morning). Earnings are due out on June 4th (shares have moved higher on 6 out of the last 7 reports). The stock is nearing a retest of the $38 resistance level. Goldman Sachs upgraded VeriFone Systems to a “buy” with a $44 price target on April 14th.

 

Tuesday

Michael Kors (KORS)- The May 29 weekly $57/$62 bear put spread was put on 2,500 times for a $1.59 debit. Open interest in the May 29 weekly $62 puts rose to 7,765 from 5,265 contracts the next morning. Earnings are due out on May 27th (shares have dropped after earnings on 3 straight reports). Michael Kors continues to see comps growth decline.

Six Flags Entertainment (SIX)- There was a rollout from 1,776 May $45 calls ($2.85 credit) into 1,776 Sep $45 calls ($3.90 debit). This trader has been rolling out call positions for several months now. On May 14th, Wedbush initiated the stock with an outperform rating and a $58 price target. They see opportunities in the international markets coming in about three years.

Financial Select Sector SPDR Fund ETF (XLF)- Roughly 70,000 Sep $26 calls were purchased for $0.22-$0.26, against open interest of 106,121 contracts. Open interest rose to 175,205 contracts the next day. The XLF topped out above $25 in December. Wells Fargo, Berkshire Hathaway, JPMorgan Chase, Bank of America, Citigroup, and Goldman Sachs account for nearly 40 percent of this financials ETF. Keep an eye on XLF.

 

Thursday

Take-Two Interactive Software (TTWO)- 4,000 June $24 puts were bought for $1.00-$1.05. There was large buying in the June $23 puts on May 8th (check out last week’s column for more on this trade). Earnings are due out on May 18th (shares have dropped after earnings on 5 out of the last 6 reports).

 

Friday

Eldorado Gold (EGO)- A rollout from 5,000 May $4.50 calls ($0.71 credit) into 5,000 June $4.50 calls ($0.83 debit). Option order flow remains bullish in several gold and silver miners.

Endo International (ENDP)- 5,000+ June $80 puts were sold for $0.60-$0.80. They acquired a portfolio of injectable products from Aspen Holdings for $130M on May 11th.

Coca-Cola (KO)- 10,000 July $43 calls were purchased for $0.27-$0.29, against open interest of 8,279 contracts and there was a rollout from 10,450 May 15 $42 puts ($0.45 debit) into 10,450 June 19 $42 puts ($1.01 credit). The roughly 25,000 July $44 calls bought from April 22nd-24th remain in open interest.

QUALCOMM (QCOM)- 2,500 July $70 calls were purchased for $2.26-$2.28, against open interest of 12,899 contracts. There was big buying in these on May 13th. The Oct $70 calls also saw large buying on the same day. Qualcomm (QCOM) is definitely seeing some buying interest lately.

Simon Property Group (SPG)- 2,000 June $180 puts were sold for $2.24-$2.25. The stock recently bounced off of support at the 200-day SMA (near $180).

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.

 

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