These in-the-money call sales may have looked bearish on the surface, but with a short-term expiry and an ex-dividend on the calendar, it was likely a dividend capture strategy at play. Merck ( US:MRK ) also had some bullish put sales take place on the afternoon of July 20, coming a week after some heavy call flow came through on the sell side. That’s either one heck of a coincidence or one heck of a big trade, with the total premium from this four-day put sale totaling more than $43 million. The $110 puts were also sold in notable size on each day, with $2.5 million sold on July 17, $2.64 million sold the next day, $8.15 million sold on July 19 and $2 million a day later. Then again on July 18, they sold $5.1 million of the same put, then $16.6 million worth on the 19th.Īnother $3.9 million worth of the July $111 puts were sold on the morning of July 21. Starting on July 17, one trader sold $2.8 million of the July $111 puts, which were in-the-money by about $10 a share as the stock was trading at $101 at the time of the trade. The trades appear to be opening trades, meaning they are bullish in nature. The reason Exxon leads this week’s list? A consistent short-term put seller. Sitting atop this week’s Options Flow Leaderboard is Exxon Mobil ( US:XOM ), which is also the largest U.S. With that in mind - and as earnings season picks up - let’s look at seven stocks with some heavy call flow over the last week. That’s even more surprising with the Nasdaq 100 index’s special rebalance in play, only its third special rebalance in history. So much so that only two cracked the top 10 - Microsoft ( US:MSFT ) and Amazon ( US:AMZN ). Notably, the options activity in mega-cap tech stocks has died off a bit. Thankfully, there’s a leaderboard of options activity for both calls and puts, helping us keep track of it all when we see outsized volume. We can follow their footsteps when looking for unusual options activity. Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price.While many investors brush off options, many others like to “follow the flow.” In other words, they want to know what the big funds and institutions are doing. Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. These trades are made because the underlying asset value is expected to change dramatically in the future, and the buyer or seller can take advantage of a greater profit margin. This occurs when the underlying price is under the strike price on a call option, or above the strike price on a put option. Time value is important to consider because it represents the difference between the strike price and the value of the underlying asset.Ĭontracts with a strike price far from the underlying price are also considered unusual because they are defined as being "out of the money". Usually, additional time until a contract expires allows more opportunity for it to reach its strike price and grow its time value. a buyer finding a seller, or a seller finding a buyer).Īnother sign of unusual activity is the trading of a contract with an expiration date in the distant future. In other words, open interest represents the quantity of contracts that individual parties have written but not yet found a counterparty for (i.e. Open interest is the number of unsettled contracts that have been traded but not yet closed by either counterparty. The volume of options activity refers to the number of contracts traded over a given time period. One way options market activity can be considered unusual is when volume is exceptionally higher than its historical average. After the option alert, the stock price moved up to $442.02. On Friday, shares of SPDR S&P 500 (NYSE:SPY) saw unusual options activity.
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