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.
A few noteworthy block trades in QQQ options on the heels of the report seemed to be expressing confidence that the strength will continue through year end.
The recent pause in the broad market rally is a good thing for stock pickers, because option order flow in individual names becomes can be a clear 'tell' in terms of bullish and bearish picks of the larger institutions.
There are a few possible reasons why players are taking positions in December upside calls and why implied volatility in the options on the stock is moving higher as well.