Next Week in Weeklys – 12/29/2013

Nothing was new on the Weeklys list that came out this past Thursday and no companies report earnings so why bother putting up a blog this weekend?  Well, I thought it may be worth pointing out that we have two different expiration dates going on next week.  CBOE lists quarter end options on a handful of indexes and exchange traded products.  These options expire Tuesday on the close – the end of the year and the end of a quarter.  If you have some very short term strategy in one of the following names below you may want to take a look at the quarterly options.  Also, as always over 300 stocks, exchange traded products and indexes have options expiring next Friday,

DIA SPDR Dow Jones Industrial Average
GLD SPDR Gold Shares ETF
IWM iShares Russell 2000
QQQ PowerShares QQQ
SPX S&P 500 Index
XEO S&P 100 – European Style
XLE Energy Select Sector SPDR

It turns out the biggest block trade in the ETF space was actually in a quarter end series.  Late Friday someone came in and bought 20,000 of the SPY Dec 31st 179 Puts for 0.05.  I’m not sure if they were closing a position (which would have been a nice profit) or spending $100,000 with a very bearish expectation for the last two days of the year.  My hope is it was covering a short and if not, let’s hope they aren’t correct as a drop of 2.66% is needed for this trade to just break even.

Finally, not coming up next week, but something that may be on the horizon showed up in the form of a trade last Thursday using serial options on Bank America (BAC – 15.67) that expire on January 10th.  A trader bought 15,000 of the BAC Jan 10th 14.50 Puts for 0.03 each (plus commissions) while the stock was trading at about 15.67.  Break even on this trade from that point would involve BAC dropping a little over 7.5%.  Someone is either nervous about a long position or sees a drop in the next couple of weeks.  I’ll be interested to see how this one turns out.