Options Market Commentary

Equities are under pressure this afternoon amid renewed uncertainty over trade talks with China. According to White House economic advisor Larry Kudlow, the negotiations have a “pretty sizable distance to go.” Currently, the S&P is -1.5% , the Russell -1.3% and the Nasdaq is -1.9%. Bonds are stronger (TLT +.3%) with investors in risk-off mode. In single name news, Twitter is down 11% despite a strong earnings report. The company will discontinue disclosing its monthly-active user data after Q1. Crude Oil is down 3% today as the dollar is mildly stronger (up .10%). The Regional Banks are outperforming today on news of a $66 billion merger between Suntrust and BB&T.  Meanwhile, Industrials (-2%) and Biotech (-3%) are lagging the market. Volatilities are stronger today with the VIX +15% to 17.73, VXN +10% to 21.69, and RVX +12% at 19.53.

ETF 30D Volatility Changes

SPY:    +13%         

IWM:   +11%   

QQQ:  +11%

Directional Options Strategies

Bullish Option Strategies

HAIN Buyer 17,000 Jan21 20 – 23 call spreads (rolls calls down, ref. 14.61)

BBD 11,000 Feb 12 – Mar 13 call spreads trade (ref. 11.62)

MHK Buyer 3,300 Feb 140 calls (Earnings 2/7, ref. 128.20)

GM 25,000 Mar 40 calls trade (ref. 38.99)

MS Buyer 2,000 Apr 44 – 50 1x2 call spreads (ref. 41.16)

EXP Seller 2,500 Jul 60 – 80 call spreads to Buy 2,500 Jul 72.5 – 85 call spreads (monetizes and rolls up, ref. 70.88)

Bearish Option Strategies

VALE Buyer 10,000 Mar 10 puts tied to stock (ref. 11.23)

CLF Seller 10,000 Feb 8^th 12.5 calls to Buy 10,000 Feb 8^th 10.5 puts (Earnings 2/8, ref. 10.69)

NXPI Buyer 22,500 Mar 80 puts tied to stock (ref. 89.13)

GE Seller 24,600 Mar 11 calls (closing, ref. 10.32)

BAC Buyer 5,000 Apr 28 puts (ref. 28.40)

F Buyer 12,000 Feb 8.5 puts (ref. 8.48)

CELG Buyer 9,000 Mar 75 puts (ref. 87.68)

Macro Options Strategies

Bullish Option Strategies

EEM Seller 17,500 Apr 40 – 45 strangles tied to stock (sells vol, ref. 42.41)

EEM Buyer 13,885 Mar 46.5 calls (ref. 42.13)

XOP Seller 11,000 Jan20 35 puts (closing, ref. 29.56)

Bearish Option Strategies

SPY Buyer 14,069 Feb 11^th 261 puts (ref. 270.72)

SPY 10,000 Feb 27^th 265 puts trade (ref. 268.97)

SPX Buyer 11,800 Mar 1^st 1500 puts (ref. 2692.81)

VGK Buyer 11,100 Mar 50 puts (ref. 51.60)

EEM Buyer 10,000 Feb 22^nd 42 – 41.5 put spreads (ref. 46.62)

EEM 15,000 Sep 42 – 38 put spreads trade (ref. 42.42)

XLF Buyer 7,126 Apr 24 – 22 1x2 put spreads (ref. 25.71)

GLD Seller 7,990 Apr 124 – 130 call spreads (ref. 123.73)

OIH Seller 4,000 Mar 18 puts to Buy 5,500 Mar 18 puts (monetizes and roll up, ref. 16.98)

XOP Buyer 11,250 Feb 27.5 puts (ref. 28.80)

Finance Trades Options Strategies

HYG 10,000 Feb 95 RevCons trade (ref. 84.74)

LLY 4,000 Apr 150 RevCons trade (ref. 118.01)

Upcoming Earnings

Volatility Standouts