Options Flow Summary: General Sentiment, Apple Inc (AAPL) & Zoran Corp (ZRAN)
General Sentiment
The US markets are staging a mild recovery following Friday's sell off, with broad averages currently up about Ω%. The CBOE VIX is down from the 23 range that it touched on Friday and is now trading around 22.19. The options market is on pace for nearly 14 million contracts. This is well above average but also far below Friday's impressive total of 19.3 million contracts.
Apple Inc (AAPL)
Earnings will be announced today after the close. Not surprisingly, AAPL options are trading briskly. 350,000 contracts are on the tape by mid-afternoon with the stock currently trading near $173.20. Options activity is focused on the November 175 and 180 calls, with more than 20,000 of each changing hands so far today. We've seen a predominance of buyers leading the flow.
By contrast, today's institutional activity in AAPL appears to be mixed. This activity includes a buyer of 5,400 Jan 180 calls this morning for $14.15 on the PHLX. We also saw a sweep buyer of 2,200 Nov 155 puts for $3.05 later in the day.
Zoran Corp (ZRAN)
We have seen unusual flow in this thinly traded semiconductor name today, with nearly 3,500 contracts changing hands (6 times the average daily level). The stock is trading at $20.48, not far from the 52-week high of $22 that was set back in April.
The majority of today's flow involves buyers accumulating the Nov 20 puts. 1,860 of these puts traded today at prices from $.80 to $1.00. We are also seeing buyers of the November 22.5 calls, suggesting that traders are expecting a significant gap move up or down in the near future.
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We have seen unusual flow in this thinly traded semiconductor name today, with nearly 3,500 contracts changing hands (6 times the average daily level). The stock is trading at $20.48, not far from the 52-week high of $22 that was set back in April.
The majority of today's flow involves buyers accumulating the Nov 20 puts. 1,860 of these puts traded today at prices from $.80 to $1.00. We are also seeing buyers of the November 22.5 calls, suggesting that traders are expecting a significant gap move up or down in the near future.
About Henry Schwartz
Henry Schwartz has traded derivatives on US and European exchanges for nearly 20 years. His experience includes market-making and institutional trading at the Hull Group, Salomon Brothers, Bear Stearns and most recently Banc of America Securities, where he led the electronic market-making project coincident with the launch of the ISE. His current work involves real-time stream analysis of options market activity for a number of leading institutional sell-side firms.
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