Options Flow Summary and Unusual Activity Alert: Commercial Metals Company (CMC) & Ingersoll Rand (IR)
General Sentiment
We are seeing a wide trading range between yesterdayís brief rally and collapse, and this morningís early sell off and bounce. This swing of well over 3Ω% in the past 24 hours has provided plenty of excitement for options traders.
At mid-afternoon, the S&P500 futures are up nearly .8%, CBOE VIX is off more than a point to 26.44, and close to 5 million each of calls and puts have traded.
Commercial Metals Company (CMC) $27.87 +4.03%
With a significant spike in the stock based on takeover chatter, CMC options have exploded to 16 times average daily option volume with a focus on the June 30 calls, currently more than $2 out of the money.
Nearly 10,000 of these contracts were traded on the ISE with Sentiment data confirming that 55% of the volume to be opening customer purchases.
Bullish unusual volume was also noted on 1/24 and 1/16, where options on CMC traded well above average daily levels with over 80% of the activity in call contracts.
Ingersoll Rand (IR) $39.52 +1.22%
Aggressively bullish flow is also seen in IR today ahead of next weekís earnings date. Options volume is more than quadruple the recent average level and is marked by consistent buying of February 37.5 through the use sweep orders spanning multiple exchanges.
More than 7000 of these calls have traded today, with 98% of the activity trading on the ask and implied volatility lifting from 46 to 48%.
Yesterday afternoon, a straddle seller in IR collected $4.50 10,000 times in the March 40 line. Today that seller may be covering short-term upside risk and taking advantage of the implied volatility ëcrushí that took place after that large sale.
Posted By: Trade Alert
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About Ellen Spiro
Ellen Spiro brings nearly 20 years market experience to her position as Vice President of Sales & Marketing of Trade Alert, LLC. Her background includes Fixed Income Derivatives trading at Deutsche Bank and starting up a similar desk at West Deutsche Landesbank as well as securities industry consulting for Coopers & Lybrand. Her current role puts her in direct contact with many of the largest participants in the equity derivatives field.
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