Weekend Review: Unusual Options Trading Review (AMR, CSTR, SLV, SFI, MSFT, SPPI)

Posted in Options 
April 30th, 2011

It is Saturday and we decided to go dig through the Friday options trading looking for unusual trading in the crazy world of stock options.  Some of these are probably just par for the course but two stood out as really unusual.  We outlined the options trading and gave color in the following: AMR Corporation (NYSE: AMR), Coinstar Inc. (NASDAQ: CSTR), iShares Silver Trust (NYSE: SLV), iStar Financial Inc. (NYSE: SFI), Microsoft Corporation (NASDAQ: MSFT), and Spectrum Pharmaceuticals, Inc. (NASDAQ: SPPI).  More details on each below…

AMR Corporation (NYSE: AMR), the parent of American Airlines, saw large trading in the LEAPS… The JAN13 $3.00 PUTS saw some 8,697 options contracts trade hands.  Keep in mind that the open interest is 44,248 contracts.  The stock saw a 2% gain but the closing price was $5.87.

Coinstar Inc. (NASDAQ: CSTR) saw its stock close up 5% at $53.98 after earnings allowed shares to run, but the MAY11 CALL and PUT volume much higher.  Here is the MAY standout strike prices:
CALL$ Vol. OpInt.
50.00  5,865  11,178
52.50  995    7,161
55.00  9,614  14,394
57.50  2,926  1,788
60.00  2,467  1,600
PUTS$ Vol.  OpInt.
45.00  2,205  6,803
47.50  7,536  7,740

iShares Silver Trust (NYSE: SLV) is getting out of hand.  Stock volumes are now trading more than the whole float and the MAY11 CALLS traded nearly 150,000 CALLS on Friday versus about 100,000 MAY11 PUTS… Unfortunately, as long as silver remains the new crack for speculators then this options activity is just likely to stay high.

iStar Financial Inc. (NYSE: SFI) is one we never recall with highly unusual options trading.  This one saw 28,676 contracts trade in the JAN12 $10.00 CALLS and the prior open interest was only 19,501 contracts.  This was on the heels of it reporting its first real profit in three years.  Shares closed up 2.1% at $9.62 on 3.5 million shares versus a 52-week range of $2.70 to $10.48 and against average daily volume of almost 1.5 million shares.

Microsoft Corporation (NASDAQ: MSFT) is no longer known for its great price volatility.  Options traders were braced for a move of just under $1.00 in either direction and shares closed down $0.79 at $25.92 on Friday on more than 319 million shares traded. We saw more than 18,000 contracts of the MAY11 $25.00 CALLS trade hands, almost 67,000 of the MAY11 $26.00 CALLS trade hands, and more than 36,000 of the MAY11 $27.00 CALLS trade hands.  With more than 10,000 contracts traded in other strike prices, there were more than 130,000 CALLS traded. That is about 3:2 in call call volume over total put volume.  Despite a drop and despite caution and despite a value trap, there are still those who want to be bullish.

Spectrum Pharmaceuticals, Inc. (NASDAQ: SPPI) saw a drop of 13% to $9.00 on more than 7.4 million shares, but this was ahead of the FDA decision.  The headlines show that FUSILEV won FDA approval for colorectal cancer.  Here were the options trades for MAY11 alone, and look for many more on Monday:
CALL$ Vol. OpInt.
9.00   1,514 6,544
10.00   3,748 5,681
11.00   6,386 7,519
12.00   1,465 2,929
13.00   1,190 1,196
PUTS$ Vol. OpInt.
6.00   1,182 3,650
7.00   3,045 6,181
8.00   3,599 6,291
9.00   1,315 3,914
10.00  1,068 1,900

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