As of today the top ten most active option contracts traded were:
- Financial Select Sector SPDR (NYSE:XLF) November 15 Put Options
- Financial Select Sector SPDR November 16 Call Options
- Pfizer (NYSE:PFE) December 19 Call Options
- PowerShares QQQ (NASDAQ:QQQQ) November 42 Put Options
- Citigroup (NYSE:C) November 5 Call Options
- Pfizer December 18 Call Options
- S&P 500 SPDR (NYSE:SPY) November 107 Put Options
- S&P 500 SPDR November 110 Call Options
- S&P 500 SPDR November 108 Put Options
- Pfizer January 20 Call Options
There seems to be a lot of speculation rushing into Pfizer before they report earnings tomorrow. According to today's option activity it looks like some bullish activity in Pfizer is expected. If you checked out today's option activity in Apple (AAPL) you would have noticed way more calls were traded than puts and the options traders had it right, with a total, what I call, WOWZER quarter from Apple. The gross margins seemed to be a little lighter than expected, but everything else was great! If you read my blog post from this morning, you may have been able to check out my Apple earnings strategy. If not check it out below. I am very happy I opened this position, and think Apple has a shot at trading higher than the after-hours high (roughly 205 a share) with the help of other good earnings reports tomorrow morning. I also sold some 21 strike put options on Texas Instruments (TXN) which I plan on closing tomorrow on implied volatility collapse, and sold 52.50 and 55 strike Caterpillar (CAT) puts which I will also look to close on implied volatility collapse after CAT reports earnings.
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3 comments:
Marco ---- To close your puts on TXN early, do you have to buy the shares back to close the position? Are there other ways to close it out early without taking ownership of the shares? Thanks for your feedback.
What do you consider a "collapse" in implied volatility? A 20% or more drop?
Yes yesterday I "sold to open" the put contracts, and today I "bought to close" the contracts. You will not be obligated to take the shares unless TXN was at or below 21 a share.. In other words the shares in no way could be "put to you" if they are above the strike. I closed them for $8 per contract.
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