Schaeffer's Options Center
Sponsored by:
Schaeffer's Daily Option Blog

Unusual Put Activity on MPC, COP, ANF, and YOKU

ANF and YOKU saw earnings-inspired put volume, put writers wagered on MPC, and COP was targeted for a strangle

by 11/17/2011 10:42 AM
Stocks quoted in this article:

Among the equities attracting put players on Wednesday were refiners Marathon Petroleum Corp. (MPC - 32.30) and ConocoPhillips (COP - 70.25), retailer Abercrombie & Fitch Co. (ANF - 49.65), and Chinese Internet issue Youku.com Inc. (YOKU - 16.58). Here's a quick roundup of some of the most popular put trades of the day:

  • First up, MPC and its sector peers retreated yesterday, thanks to news that the Seaway pipeline will be reversed. Nevertheless, it appears a slew of speculators employed puts to bet on support for the equity. By the closing bell, the stock had seen around 19,000 puts cross the tape -- about 23 times the norm. Most notably, MPC's January 2012 30-strike put saw almost 5,700 contracts traded -- the majority of which crossed at the bid price, suggesting they were sold. Plus, put open interest at the LEAPS strike swelled overnight, confirming the initiation of new positions. By writing the puts to open, the sellers are expecting MPC to remain atop the $30 level through the next couple of months. At last check, the stock has given up another 1% to flirt with the $32.30 level.
  • Likewise, COP also suffered along with its fellow refiners yesterday. However, one trader employed both puts and calls to implement a bullishly biased long strangle on the stock. Specifically, the trader bought several thousand January 2012 62.50-strike puts for $1.31 each, and simultaneously purchased an equal amount of January 2012 70-strike calls for $4 each, resulting in a net debit of $5.31. By constructing the spread, the strategist will realize a profit of COP breaches the $57.19 level (put strike minus net debit), or rallies north of the $75.31 level (call strike plus net debit), within the options' lifetime. At last look, COP has recovered 0.7% to linger in the $70.25 vicinity.
  • Moving on, ANF was a fan favorite among put players yesterday, as the shares gapped lower in the wake of a lackluster earnings showing. By the bell, the stock had seen about 36,000 puts traded -- four times its average daily put volume. However, it appears a healthy portion of the put volume consisted of sell-to-open activity at the December 45 strike, which saw open interest increase by more than 3,500 contracts overnight. By writing the puts to open, the sellers were expecting ANF to maintain its foothold atop the $45 level through the next several weeks. In early trading, the stock has rebounded 3.2% to flirt with the $49.65 level.
  • Finally, ahead of last night's turn in the earnings spotlight, put sellers also swarmed YOKU. Most notably, it looks like traders sold to open the November 20 put, which saw open interest jump by more than 1,200 overnight. Unfortunately for them, however, YOKU confessed to a wider-than-anticipated third-quarter loss, sending the shares plummeting out of the gate today. At last check, YOKU has surrendered 19.3% to linger near the $16.58 level.


permalink

Featured Brokers
ADVERTISEMENT
Unusual Option Volume
Option Flow
ADVERTISEMENT
ADVERTISEMENT
Most Active Stocks
Most Active Option Strikes
Largest Open Interest

Partner Center

© 2014 Schaeffer's Investment Research, Inc. 5151 Pfeiffer Road, Suite 250, Cincinnati, Ohio 45242 Phone: (800) 448-2080 FAX: (513) 589-3810 Int'l Callers: (513) 589-3800 Email: service@sir-inc.com

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

Market Data provided by QuoteMedia.com | Data delayed 15-20 minutes unless otherwise indicated.