*Scanning all single-stocks subject to 2500 contracts minimum call or put volume

AT&T (T) is down $1.37 to $28.25 and the Dow’s biggest loser today after the DOJ moved to block the company’s proposed acquisition of T-Mobile. 69,000 calls and 112,000 puts now traded on Ma Bell. The top trade is a Dec 24 – 27 (2X1) put ratio spread, bought-to-open at 16 cents, 8600X on PHLX. The bearish play doesn’t appear tied to stock and seems to be targeting a move towards $24 (~15%) through the December expiration (107 days). Implied volatility in AT&T options is also moving today, up 32 percent to 27.5.

*Scanning all single-stocks subject to 2500 contracts minimum call or put volume

AMR adds 14 cents to $3.70 and Sep 4 calls on the airliner are seeing interest today. 15,448 traded against 9,689 in open interest. The top two trades are blocks (2,182 X 2) at 12 and 13 cents when the market was 12 to 14 cents. Beyond that, most of the volume has been at the offer. The action seems to include a mix of buying and selling — opening and closing activity. The contract is 8.1 percent OTM with a delta of .34 and 16 days of life remaining. The market is 11 to 13 cents and VWAP so far today is 12.3 cents. AMR hit a 52-week low of $3.17 Friday, but is on a three-day 13.5 percent winning streak so far this week.

Sprint (S) sees heavy trading after the Department of Justice filed to block AT&T’s proposed acquisition of T-Mobile. Sprint shares took a 13.7 percent hit on Mar 21 when the deal was announced. Today, the stock is up 23 cents to $3.79 and options volume in the name so far includes 43,000 calls/2300 puts. September 4 calls, which are 5.5 percent out-of-the-money and expire in two-and-a-half weeks, are the most actives. 15,700 traded. Sep 3.5, Sep 5, Oct 4 and Jan 6 calls on Sprint are busy as well. Shares are on a four-day 18 percent winning run higher, but remain 26 percent below the levels seen before the stock gapped lower on a 7/28 earnings release.

The top options trades so far today are in the iShares Emerging Markets Fund (EEM), which is up a nickel to $41.88. EEM Dec 34 – 40 put spread trades at $1.34, 58000X on ISE. At about the same time, the Sep 41 – 46 put spread trades on the emerging markets ETF at $3.23, 50,500X on ISE. Taken together, and with help from ISEE data, the four-way appears to be a customer rolling out of a Sep put spreads and into a new position in December. If so, it probably closes out a position opened in late-May when the Sep 41 – 46 put spread was bought at $1.39, 50,500X (see 5/26 color). Shares are down 10.6 percent since that time and 46 leg of the spread, which was 1.8 percent OTM at the time, is now 8.9 percent in-the-money. Dec 40 puts are 4.5 percent OTM and, so while the strategist collected a nice profit on the Sep spread, they seem to be extending the bearish play an additional three months and bracing for additional losses in the emerging markets through mid-December.

*Scanning all single-stocks subject to 2500 contracts minimum call or put volume