Repeat Option Activity was ‘Order of the Day’ Monday

Unusual Option Activity Report

The option activity wasn’t as unusual as it seemed multiple stocks experience repeat activity on Monday. That means that there has been more than one day or unusual trade that occurred over that period. Seeing multiple days of unusual activity or multiple trades can show even more conviction from traders.

I would like to say there was a theme to these “repeat offenders,” but there wasn’t. Monday’s list is a broad array of companies from multiple sectors. That makes sense given the bullish movement in the market on Monday. However, isolating the companies experiencing a higher level of option activity may help you differentiate what stocks to watch.

Repeat Option Activity List

iShares MSCI Emerging Markets ETF (NYSEARCA: EEM)

October 5, 2020

• Trade: Long Call Vertical
• Option Activity: 25,000 19 MAR 21 48/53 call BOT @ $1.03
• Outlook: The strike/expiration combination is looking for EEM to trade north of $53 by March’s expiration. The driver for the ETF is a weaker U.S. dollar and stronger Chinese companies that dominate the holdings of the fund.

October 12, 2020

• Trade: Long Synthetic
• Option Activity: 54,000 18 DEC 20 $48 call BOT @ $0.83 to $0.85, 27,000 puts $41 sold @ $0.53 to $0.54 in three prints
• Outlook: This trade carries a higher amount of capital because of the short put option and provides a risk/reward combination like owning the stock. This reflects an expectation of a rising share price of the ETF in the near-term.

General Electric Company (NYSE: GE)

October 7, 2020

• Trade: Long Call
• Option Activity: 47,000 15 JAN 21 $10 call BOT at $0.09 less than open interest of 550,569, but comes following a 1.1 million share block buy order at $6.23
• Outlook: The strike/expiration reflects an expected breakout above its $7 resistance and movement to $10 or higher.

October 12, 2020

• Trade: Long Call Vertical
• Option Activity: 14,552 18 DEC 20 7/9 BOT @ $0.43 in one print
• Outlook: This strike/expiration combination is looking for a breakout above the $7 resistance as well as breaking its June high price of $8.50. The trade reaches max gain above $9.

Paypal Holdings Inc (NASDAQ: PYPL)

October 12, 2020

• Trade: Bullish Combo
• Option Activity: 2,252 20 NOV 20 200/220 long call vertical BOT @ $6.47; 2,252 20 NOV 20 $170 put sold @ $2.57 to $2.58 in two prints
• Outlook: The strike/expiration reflects an expectation the price will close above $220 by November’s expiration.

October 12, 2020

• Trade: Long Synthetic
• Option Activity: 7,500 18 DEC 20 $210 call BOT @ $11.64, 7,500 18 DEC 20 $210 put sold @ $18.84 in one print
• Outlook: This trade carries a higher amount of capital because of the short put option and provides a risk/reward combination like owning the stock. This reflects an expectation of a rising share price of the ETF in the near-term.

Alibaba Group Holding Ltd (NYSE: BABA)

October 8, 2020

• Trade: Long Call
• Option Activity: 2,319 15 JAN 20 $330 call BOT @ $15.10 in one print
• Outlook: The strike/expiration reflects an expectation the price will close above $330 by January’s expiration and carries a breakeven of $345.10.

October 12, 2020

• Trade: Long call
• Option Activity: 2,500 20 NOV 20 $350 call BOT @ $4.55 in one print
• Outlook: The strike/expiration reflects an expectation the price will close above $350 by November’s expiration and carries a breakeven of $354.55.

Aramark (NYSE: ARMK)

October 5, 2020

• Trade: Short Put
• Option Activity: 10,000 20 NOV 20 $27 put sold @ $1.80 to $1.95
• Outlook: The strike/expiration reflects an expectation that the price will stay above $27 by expiration.

October 12, 2020

• Trade: Short Put
• Option Activity: 10,000 18 DEC 20 $28 PUT SOLD @ $2.15 in one print
• Outlook: The strike/expiration reflects an expectation that the price will stay above $28 by expiration.

Barrick Gold Corp (NYSE: GOLD)

October 5, 2020

• Trade: Short Put
• Option Activity: 2,500 15 JAN 21 $27 put sold @ $2.28 in one print
• Outlook: The strike/expiration reflects an expectation that the price will stay above $27 by expiration.

October 12, 2020

• Trade: Long Call
• Option Activity: 9,662 16 OCT $29 call BOT @ $0.13 to $0.14 in two prints
• Outlook: The strike/expiration reflects an expectation that the price will close above $29 by expiration. The activity in GOLD coincides with bullish option activity on GLD, SLV, and AUY last week.

Delta Air Lines, Inc (NYSE: DAL)

October 5, 2020

• Trade: Long Call Roll
• Option Activity: 4,000 20 NOV 20 $34 call BOT at $2.39; 4,000 16 OCT 20 32/40 call vertical sold for $1.59. Vertical rolled to a single call in one print.
• Outlook: The strike/expiration reflects an expectation that the price will close above $34 by expiration and has a breakeven of $36.39.

October 12, 2020

• Trade: Long Call Roll
• Option Activity: 3,500 20 NOV 20 $33 call BOT @ $2.66. 3,500 16 OCT 20 $33 call sold @ $0.86
• Outlook: The strike/expiration reflects an expectation that the price will stay above $33 by expiration and has a breakeven of $35.66.

Conclusion

The renewed unusual option activity helps you key off an even more refined list of names in the coming weeks. This may not be the last of the activity and so it provides an opportunity to watch for other trades. Of course, we’ll be following the activity on the Unusual Option Activity Tracker and in the chat room.