Options are trading triple normal volume levels today, with more than 18,000 contracts on the tape vs recent average near 9300 contracts/day. Despite a new 52Wk high in the stock, near $45, the option flow is notably bearish, with 12,000 puts trading and only 5400 calls, a significant change from the recent average put/call ratio of 0.5. Sep $40 strike puts are the focus, with an aggressive sweep to buy 7800 just after 1pm for 1.65 helping lift IV 2.5% at the strike to create new open interest.
About the Author (Author Profile)
Henry Schwartz is the president of Trade Alert LLC, a provider of real-time options analysis tools to leading Wall Street firms. His systems analyze hundreds of thousands of transactions per second to help professionals identify and interpret market activity in real time, supporting informed trading decisions and intelligent idea generation. He has held institutional trading and management roles with Bank of America, Bear Stearns, Salomon Brothers and the Hull Group, and made markets on the CBOE and AMEX floors in the US, and EUREX and MONEP overseas. Prior to founding Trade Alert, he led the electronic market-making group at Bank of America coincident with the launch of the International Securities Exchange. He received his bachelor’s degree in Economics from the University of California, San Diego and his MBA from NYU’s Stern School of Business.