With cold weather sweeping into the Northeast and stores gearing up for millions of shoppers in search of gifts, the winter and holiday plays were drawing some of the strongest interest from option traders Tuesday.
One of the busiest names was the
Energy Select Sector
ETF, whose put options were active as oil traded higher. The January 49/March 47 put spread traded 40,000 times.
Here, a trader appears to have bought the March puts and sold the January options. Both are out of the money. A strategy of this nature may well reflect a trader expecting the price of oil to rise over the short term before falling into the spring. The ETF was up 64 cents, or 1.3%, to $50.90.
March 50 calls traded 35,000 contracts, more than double the open interest for the strike. The buyer of the calls is likely expecting a strong holiday season for the retailer and a move up in the stock to go along with it.
Shares of Wal-Mart were higher by 40 cents, or 0.8%, to $50.02.
saw the December 25/January 27.50 call spread trade 20,000 times. Also, the Janaury 25 calls have traded 16,500 contracts and were up 55 cents. Intel's stock was climbing 83 cents, or 3.3%, to $26.08.
December 42.50 calls changed hands 18,500 times as the stock traded higher. The calls were up 10 cents on the day.
The calls are currently at the money, and an investor may be looking for the stock to break through the strike and continue its uptrend. On the other hand, the intent might have been to sell the calls into the stock's strength. Yahoo's shares were gaining 22 cents, or 0.5%, to $42.50.
also had active options.
Citigroup's March 50 calls traded 30,250 times. The open interest for the strike was 19,400 contracts. The stock was up 32 cents, or 0.7%, to $48.83. Google had the December 410 calls trade 12,000 times and climb $3.30 each. Google shares were up $5.60, or 1.4%, to $414.96. Meanwhile, Guidant's December 65 calls traded 12,000 times. The stock was down 60 cents, or 1%, to $61.10.
The CBOE Market Volatility Index (VIX), which is based on the implied volatility of the
options and is used as a gauge for fear in the market, was recently down 1.9% to 10.62. The CBOE Nasdaq Volatility Index, a measure for the implied volatility of the Nasdaq 100, was lower by 2.5% to 13.75.