July expiry 38 strike price. I see 98697 call contracts (OI 13709) and 98685 (OI 13810) traded so these are new positions. The calls traded at the ask of 0.05 so this had to be a buy, since it's basically worthless being so far OTM. Can't tell for sure what happened at the puts but it looks like that one happened closer to the bid based on today's price range so puts were sold. If this is correct, and these are naked trades, then someone expects the stock price to go up significantly and soon.
The July trades continue and now the same activity has started on the October expiry 38 strike price - selling puts and buying calls. That is a bullish play, and as others have suggested, it is probably a hedge against a short position.
New home sales data today was better than expected which may explain today's surge in stock price. Perhaps some short covering is fueling the pop too.
I think this has to do with the upcoming tender offer. Most likely - a big player is placing his bet and the options are part of hedging his bet.
CBS/CBSO has a similar exchange offer and you can see that there's a huge open interest for calls/puts expiring next month for CBSO.
You could short the stock and lock in your gain but you'll be on the hook to pay the borrow fee. By using options, you can lock in your "borrow fee" maybe?
Someone please correct me if I'm wrong.
Well it looks like that guy has more than one fat finger, cause the exact same trade continues to run today!!
Open interest skyrocketed to ~185k end of yesterday on 20M shares traded. And now, so far today, ANOTHER roughly 33k contracts (puts near the bid and calls at the ask) have traded today and already 3.6M shares too.. and it slowly keeps going up as I watch.
It's gotta be related to the split-off, since that exchange ends June 30 which is before the July expiry date of these options, but how exactly, I just don't know.
Wow... now up to 155k contracts on both sides. And from a cross I just saw puts are being traded close to the bid (so someone is selling to open) and calls are being bought at the ask (buy to open). Volume of shares traded is now 17M which is over 6X the daily average. 155k contracts corresponds to 15.5M shares which is basically the extra share volume.
I don't know what this all means, just that it is a huge strategic move.