With S&P Futures up 18 points (1%) the broad market appears set to end a five-day losing streak this morning, and after seeing diminishing volume during the second half of November we see trading activity across the options market has picked up in the start of December. 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. The following names saw noteworthy bullish flow yesterday. Here are five.
Activity picked up in the telecom sector. AT&T (T) led the early action, with buyer paying an average price of $0.179 per contract for nearly 35,000 Dec 35 calls on the stock. Shares finished the day down $0.35 to $34.25 and the contract is $0.75 out-of-the-money and expiring in two weeks. Open interest numbers confirm that the position was opening and, as we can see from the chart below, 30-day vols in AT&T were moving higher as well.
Not to be outdone, options volume in Verizon (VZ) was 2X the daily average yesterday, with most of the flow surfacing early in the session. About 25,000 contracts traded (5x normal) in first hour and calls led puts by a ratio of 3:1. The activity featured a few high-delta sweep call buyers in the January 44 and 46 strikes when shares were near $48.50. 30-day implied volatility was up 5.5% to 16.
Elsewhere, Broadcom (BRCM) saw higher call volume. The stock was up 44 cents to $27.50 amid strength in the iPhone suppliers (SWKS, AVGO, CRUS, etc) on reports Apple inked a deal with China Mobile. On the options front, about 63,000 calls and 15,000 puts traded on Broadcom yesterday, which was 4X the daily average. Weekly 28 calls, which are $0.50 out-of-the-money and expiring after today, saw the biggest increase in open interest. The stock is up to $27.70 in pre-market Friday morning.