One player in the options market seems to be anticipating positive news and opened a sizable spread trade on the stock ahead of the announcement.
The old adage 'don't fight the tape' seems to be in force at the moment, with several names seeing bullish flow this week that might warrant a long view, outright or in an outperformance type of strategy.
Traders' focus is back on US and global economic conditions, tapering and the slew of earnings data set to be released over the next two weeks.
In the options market, we noticed some positioning in three names ahead of the upcoming catalysts. Two are retailers and one is an earnings play.
We expect 2014 to be another good one for options traders, as the basic motivating factors (hedging and leverage) are persisting and continued macroeconomic issues driving steady volume.
Twitter options blew past all other single-stocks for total volume, including Facebook, Apple, Tesla. In fact only the SPYs traded more contracts than TWTR on Thursday. Here is my gut feeling.
In my view, this year is why a major part of eveyone's (including trader's) assets should be locked away in a 401k/529/IRA etc account and untouched for decades.
One big player in the options market made a decisive bet yesterday that this bull has more room to run.
This is what options flow is suggesting into some big earnings reports this week.
The combination of SPX puts and VIX calls open today indicates a moderately high level of hedging into year end, which should help avoid an ugly spiral downward if the broad market continues to slip lower.