Friday, May 10, 2024
The iShares MSCI Emerging Markets ETF (EEM) is a very popular stock ETF which tracks companies in emerging market countries. The ETF is commonly used for asset allocation purposes in portfolios to gain exposure to the emerging markets asset class. Last week, a very large block trade occurred, which was likely a covered call trade. […]
Block trades can be useful in determining what smart money sentiment is on certain stocks. For example, a large put spread traded last week in Chewy (CHWY). The pet supplier site has seen its share price rebound off the lows in recent weeks. However, this recent put spread suggests there could be further downside ahead. […]
Once a popular meme stock, Bed, Bath & Beyond (BBBY) could be in trouble. The stock price has recently shot higher on news that insiders are buying the shares. However, a large purchase of put options that expire in January of 2024 suggests there could be significant downside in the stock. This put position will […]
There was quite a bit of unusual options action in the Energy Select Sector SPDR ETF (XLE) last week. Energy has been in the spotlight with the price of crude oil plunging in recent days. However, a large ratio call spread in XLE suggests that energy stocks may have more room to rise this year. […]
With interest rates moving higher, so are bond yields. However, bond funds still aren’t that exciting from a yield perspective. For instance, iShares 7-10 Year Treasury Bond ETF (IEF) has a dividend yield of only 1.5%. One way to boost the cash flow from popular bond funds like IEF is to sell calls against the […]
A massive options trade occurred last week in iBoxx $ High Yield Corporate Bond ETF (HYG). HYG is a massively popular high yield bond fund that also has a very active options chain. A put spread was recently sold on HYG with over 150,000 contracts per leg. This trade is likely meant to boost “yield” […]
Based on a large options trade in the Financial Select Sector SPDR ETF (XLF), it appears a well-capitalized trader believes that financial stocks may move sideways for the remainder of the year. The trader possibly sold a 5,000-lot strangle in January XLF options. A strangle involves selling a call above and a put below the […]
Once you are able to determine where unusual options activity is occurring, the next step is looking at the time and sales list. This is the granular trade information, where you can sort the list and look at what the biggest trades have been, and what caused the underlying instrument to show up on your […]
When searching for and analyzing unusual options activity, it’s important to understand all the data being presented. Key variables include volume, relative volume, bearish versus bullish activity, and upcoming earnings/event dates. Having a grasp of these data points will help traders better grasp why unusual activity may be occurring.
An intriguing way to hedge your portfolio’s downside risk for essentially no cost is by using a put spread collar. A large zero-cost put spread collar was placed last week on the SPDR S&P 500 ETF (SPY) The trader sold calls and used the proceeds to purchase a put spread. The position will give a […]
