It?s an extremely short duration and a high premium paid, so this customer appears to be looking for a strong upside move in DG between now and next Friday.
Long EFA Owner Adding Income
Earlier today when the iShares MSCI EAFE Index Fund was trading at 62.66, a customer sold over 67,000 of the Jan 63 calls in blocks of 3-6 thousand contracts. They began selling them at .67 a contract and has sold them all the way down to .59 a contract.? This is either a delta play on EFA falling lower, or, more likely the customer is long a large block of EFA and is looking to add some income in the name between now and January expiration.?
If this trade is a synthetic buy-write, it should be viewed as neutral to slightly bullish the index.? It should be considered bearish implied volatility and realized volatility in EFA over the next 40 days or so.?
Traders looking to piggy back this trade could consider buying the Jan 62 calls which are ITM, but should be aware that this ETF has a large dividend estimated to be over 1.65 on December 24th.
Delta Neutral Play on WFT Volatility
Weatherford Intl. was trading at 11.02 earlier today when a customer bought 16,600 of the Jan 11 calls paying 1.13 tied up to stock around 11.30 a share.? This appears to be a delta neutral play on WFT volatility.? The stock has had an extremely rough road the last few months (as all oil stocks have).
This play appears to be a direct play on movement between now and January.? The trader is betting that oil and WFT with it will move either lower or high some substantial matter that owning this call/stock combo will produce a profit with enough movement.? With a? straddle price of a touch under 2 dollars, the trader is looking for close to an 18% move.
Traders looking to piggy back could execute a short calendar spread or some sort of short butterfly to buy gamma while reducing the cost.
Looking for Quick, Strong Upside in DG
Dollar General trading 69.55 today a customer bought 10,000 of the DG Dec 71 calls paying 1.25 electronically.? There? was no stock done with the trade, although there could have been.? It?s an extremely short duration and a high premium paid, this customer appears to be looking for a strong upside move in DG between now and next Friday.
This trade should be considered extremely bullish the underlying and volatility between now and December expiration.? ? Traders looking to piggy back this option could consider buying the 70 calls for around 1.85 and selling the 71 or 72?s to create a call spread that is somewhat cheap.? This purchase has moved upside calls in December flattening the curve making bull call spread more desirable than they were prior to this trade.