Monday’s Bullish Trading
Las Vegas (LVS) adds 37 cents to $53.43 and it looks like 10,000 May 55 calls are sold on the casino-operator for $1.40, 10,000 September 60 calls bought for $2.01 and 10,000 September 70 calls sold at 55 cents. Looking at trade history and open interest, it appears that the activity in May 55 calls Monday covers a position opened on March 26 when the same contract was being bought for $2.85 per contract. The stock is down 5.5 percent since that time and, while the May 55s are apparently being offset for a loss, a new position is being opened in the September 60 ? 70 call spread on LVS for $1.46. If so, the position adjustment seems to be expressing confidence that LVS will recover recent losses in the months ahead.
Bullish trading was also seen in Hologic (HOLX), Dupont (DD), and Skyworks Solutions (SWKS).
Monday’s Bearish Trading
Mondelez (MDLZ) notched record highs early, but is now down 9 cents to $31.60 amid a flurry of put options activity on the Deerfield, IL snack foods company. 47,000 puts and 5,400 calls traded on the stock so far. May 27 puts, which are 14.6 percent out-of-the-money and expiring in 25 days, are the most active in MDLZ. 16,745 contracts traded against 24.231 in open interest. May 28 and 29 puts are also seeing interest and 30-day implied volatility in options on Mondelez is up 18.5 percent to 30. It’s not clear what is motivating the high volume Monday. The stock was up more than 5 percent Friday on news Nelson Peltz’s Trian Fund Management has taken a large stake in the company.
Bearish trading was also seen in Kimberly Clark (KMB), Hasbro (HAS), and Mens Warehouse (MW).
Index Recap
Implied volatility [IV] is broadly lower across the options market Monday. CBOE Volatility Index (VIX), which tracks the IV priced into a strip of S&P 500 Index (SPX) options, is down .71 to 14.26 after the S&P erased early losses and is now up 8.88 points to 1,564.13. NASDAQ Volatility Index (.VXN) is down 1.28 to 15.89 and IV on the Dow, as measured by .VXD, is off .47 to 13.12. Meanwhile, US Oil Fund (USO) is up 43 cents to $31.82 and implied volatility in the options on the ETF (.OVX) dropped 2.49 to 25.08. Lastly, .GVZ, which tracks IV of options on the SPDR Gold ETF (GLD), is down 1.22 to 23.15.
Analyzing the ETF Market
SPDR Technology Fund (XLK) is up 29 cents to $29.64 and options volume on the ETF is running 2.5X the daily average. Approximately 32,000 calls and 2,300 puts so far. The flow is heavily concentrated in May 30 calls on XLK. 26,650 contracts traded, including a 12,584-contract block for 23 cents per contract when the market was 22 to 23 cents. XLK is a fund that holds all of the technology-related names from the S&P 500 and a number of important companies from the sector are due to report this week, including Texas Instruments (TXN) Monday and Apple Computer (AAPL) Tuesday afternoon.
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