Wednesday, April 24, 2024
One way to trade a potential market rebound without the risk of buying stocks outright is by using covered calls. A covered call will cap the upside of a stock or index, but provides cash flow and a bit of downside cushion. Recently, a trader placed a 20,000-lot covered call trade using iShares Russell 2000 […]
With energy markets being highly volatile this year, it’s not a surprise to see large block trades occur in big energy companies. Oil and gas giant, Exxon Mobil (XOM), tends to have plenty of options volume on a regular basis. However, on a busy day last week, it traded nearly twice the amount of average […]
A very unusual options block trade hit the tape last week in Lithia Motors (LAD). The automobile dealership company typically trades about 200 options a day on average. However, a trader recently executed a 9,500-lot trade of November covered calls in LAD options. The trade could suggest there is both a floor and a ceiling […]
It’s been a high volatility year in the financial markets. The VIX (Cboe S&P Implied Volatility Index) has been historically high for most of 2022. A large put sale in Proshares Ultra VIX Short Term Futures ETF (UVXY) suggests that volatility could remain at least moderately elevated into 2023. UVXY is a popular short-term volatility […]
Stocks finally halted their selloff at the midpoint of last week, with the major indices all up at least 2% on the day. On that day, the iShares Russell 2000 ETF (IWM) was up over 3%, marking an outperformance from small cap stocks. A trader appears to have used the opportunity to place a 10,000-lot […]
Volatility is back to high levels after the Fed sounded increasingly hawkish after last week’s FOMC meeting. At least one volatility ETF, the ProShares VIX Short-Term Futures ETF (VIXY), saw an unusual increase in options volume during the period. However, it seems there was a fair amount of put buying, suggesting traders believe volatility may […]
Even with rates going higher, fixed income ETFs don’t tend to move all that much. One way to amplify your cash flow from a fixed income product is by using options. Last week, some appeared to have sold 25,000 put spreads in the Invesco Senior Loan ETF (BKLN). BKLN has only moved in a $2 […]
A large block trade was placed last week in the beleaguered exercise equipment maker, Peloton (PTON). The 30,000 contract diagonal call spread may suggest there is some medium-term upside in the stock. The trade also implies there is a limit to how high the stock may climb over the next year and a half. The […]
The steel industry showed up on the unusual options volume radar last week, with both United States Steel (X) and Nucor (NUE) near the top of the list. NUE preannounced much lower than expected earnings, and X was expected to follow suit. At least some traders were snatching up blocks of short-term X puts, possibly […]
It’s not often that you see a large options block trade open up with only a day until expiration. Yet, that is what occurred last week in Invesco QQQ Trust (QQQ), the extremely popular Nasdaq 100 ETF. The trade appears to be a one-day covered call that generated over $5 million in premiums collected from […]
