The most interesting trading today besides the sudden volume pick up is the action seen in the stock options.  It appears that two huge PUT OPTION positions were closed out.  The JANUARY 2010 $30 PUTS have seen 41,551 contracts trade and the open interest was 41,760 before today.  The JANUARY 2010 $15 PUTS have traded 40,728 contracts and the open interest was 41,341 before today.

40,000 options contracts is representative of 4 million shares on a fully leveraged basis.

Jon C. Ogg
NOVEMBER 13, 2008

While this looks paltry in comparison, we are also seeing some activity in the $18 and $16 calls for the same month with more than 5,000 contracts each.  September options activity is also seeing increased activity. although at 2,858 of the $16 Calls and 1,615 of the $18 calls these will seem pidly in comparison.

Be advised that this 100,000 contract volume in the OCT-08 $17 Calls is even multiple sizes of all the other options’ open interest in all strike prices seen for the entire run of September and October combined.

JON OGG

September 3, 2008

OPTION/STRIKE  Volume   OpInt
SEP08 $25.00    21,517    11,866
SEP08 $30.00    8,643      7,440

We are even seeing some further out contracts trade:

OPTION/STRIKE  Volume  OpInt
OCT08 $25.00    4,956    1,793
OCT08 $30.00    1,851    16
NOV08 $35.00   1,760    8,576
JAN09 $30.00    1,358    2,446
JAN09 $35.00    1,437    4,186

This is exponential call option activity in the stock today and we still have more than 2 and a half hours to the close.  Shares are up almost 6.5% at $24.02 on almost 6 million shares (average daily volume 6.15 million).  The 52-week trading range is $21.54 to $41.45.

JON OGG
AUGUST 22, 2008

ALCOA trades at $32.40 and we have seen more than 30,000 contracts of the OCT08 $45.00 CALLS trading hands.  The open interest was high already with more than 47,000 contracts listed as open but there is almost as large of an open interest in the $42.50 and $40.00 strikes for the same month.

As a reminder, this stock has been speculated on before and it has been the subject of merger rumors as well.  30,00 contracts is representative of 3,000,000 shares on a fully leveraged basis.  This stock has only traded about 4.7 million shares today and the normal volume is 14.5 million shares per day.

Its 52-week trading range is $26.69 to $44.77.  If a deal is coming or if anything is brewing, then it would be a big one considering the current investment and merger climate during a credit crunch.  Its market cap is about $26.3 Billion as of today.

12:07 PM EST

STORY UPDATED AT 12:15 PM EST… WE ARE BEING TOLD THIS IS A CALL SPREAD TRANSACTION, BUT WE HAVEN’T SEEN ALL OF THE CONTRACT TRADES PRINTED AS OF YET……… WHETHER OR NOT THAT IS THE CASE MIGHT NOT BE KNOW FOR SOME TIME.  REGARDLESS OF THIS, THIS IS HIGHLY UNUSUAL OPTIONS ACTIVITY……….. -JO

JON OGG

AUGUST 14, 2008

OPTIONS/STRIKE        Volume    OpInt
AUG08 $4.00 CALLS    1,453    24,641
AUG08 $5.00 CALLS    1,484    48,785
SEP08 $5.00 CALLS    1,291    22,843
OCT08 $9.00 CALLS    1,014    5,344
JAN09 $7.50 CALLS    5,757    80,202
JAN09 $12.50 CALLS    11,740    123,372
JAN10 $10.00 CALLS     5,011    35,537
JAN10 $20.00 CALLS    10,409    40,964
For whatever it is worth, there has been some activity in the PUT OPTIONS that expire in just two days:

OPTIONS/STRIKE        Volume    OpInt
AUG08 $4.00 PUTS    5,065    55,674
AUG08 $5.00 PUTS    5,509    60,846
SEP08 $4.00 PUTS    1,757    21,882

Jon C. Ogg
August 13, 2008

We have seen 6,779 option contracts trade in the OCT08 $30.00 CALLS and the prior day’s open interest was already 15,118.  It is always possible that this was a close-out trade as this has not created any new added major volume in the underlying stock.  At 10:55 AM EST we have seen only 430,000 shares trade and the stock is basically flat.  The volume and the open interest here in this contract alone is larger on both current volume and open interest than all of the others between August and October combined.

It’s hard to tell of this is real speculation or if it is just a hedge transaction even after looking at the quote recaps.  This is the old Crown, Cork, and Seal.  Crown manufactures, designs, and sells packaging products for consumer goods, foods, and beverages.  Whatever the trade is, this one does stand out if it is a new standalone position.  Otherwise, it might just be another day at the office.

Jon C. Ogg
August 11, 2008

OPTIONS/STRIKE        Volume    OpInt
AUG08 $35.00 CALLS  18,419    3,834
AUG08 $35.00 PUTS    18,350    20,552

The interest in these two contracts has more volume than all other near-strike options out on the calendar combined.   The stock isn’t getting any massive ripples ahead of the earnings and shares are down 1% at $21.60 on more than 2.8 million shares at 12:35 PM EST.

For whatever it is worth, traders must be expecting dismal numbers ahead because this stock is barely above its 52-week lows ($21.35 to $68.40 yearly trading range).

Jon C. Ogg
August 7, 2008

OPTION (STRIKE)             8-05        OpInt
AUG08 $35.00 CALLS    179,560   579,365
AUG08 $37.50 CALLS    61,389    208,434
AUG08 $40.00 CALLS    257,962  273,812
AUG08 $35.00 PUTS      179,511  576,381
AUG08 $37.50 PUTS      5,000      178,535
AUG08 $40.00 PUTS      5,011      245,879

The reason these are so critical is that the options are set to expire in less than ten days on Friday, August 15, 2008.

Jon C. Ogg
August 6, 2008

The AUG08 $15.00 CALLS have traded more than 2,000 contracts.  But the big kahuna is 22,510 contracts of the SEP08 $15.00 CALLS, which had an open interest of 9,575 contracts before this.  We’ve also seen 2,312 contracts of the SEP08 $17.50 CALLS trade hands.

Since coming public in 2005 this stock is up some 300% or so.  It’s hard to imagine what is being expected out of the norm for earnings, but someone sure seems to be acting like they know something.

20,000 contracts represents 2,000,000 shares on a fully leveraged basis, yet the average daily volume in the stock is only about 3.1 million shares.  So far shares today are down 0.4% at $14.57 and the 52-week trading range is $9.72 to $19.54.

Jon C. Ogg
July 28, 2008

Barr Labs closed up 1.6% today at $46.82, but its market cap at that price is already $5.06 Billion.  Shares popped 15% on more than 172,000 shares as of 7:26 PM EST to $54.11 in late after-hours trading after the report came out.  That gives a new implied market cap of about $5.8 Billion.

We’ve also seen TEVA trade 1.387 million shares after-hours and its last stock trade was down 2.1% at $41.52 (7:26 PM EST).

BRL trades only about 1.8 million shares per day and TEVA trades about 6 million shares per day.  It is hard to tell if today’s elevated options activity in BRL call options gave up any real red flags or not.  We did see the following trades and you can see these are high compared to the open interest:

Call/Strike        Volume  OpInt
JUL08 $45.00     2,195    4,393
JUL08 $50.00     1,320    898
AUG08 $45.00   3,688    8,571
AUG08 $50.00   8,109    3,466
AUG08 $55.00   3,180    1,553
NOV08 $50.00   1,286   1,096

Jon C. Ogg
July 16, 2008