Recall last Wednesday’s option flow was dominated by large scale upside buying in a number of financials, including C, JPM, BCS, GS and MS, possibly against a bearish positing in the XLF Dec 10-12 put spread, and since that time, SPX (and XLF) is up an impressive 5% and a few of these names (C, BCS, MS) have outperformed the market. The 60K of Barclays Dec 12 Calls bought for 15c are now 40cent bid. The 50K Citi Dec 29 calls bought for 23c are 50c bid, and the 71K JPM Dec 34 calls bought for 13.5c are 17c bid.
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.