Weekly Weekly’s Option Report 1.8.15

Oil, earnings and stocks with hot options action are all coming your way.  I’m Angela Miles covering Weeklys set to expire tomorrow. Next Friday is a traditional options expiration.

Let’s get rolling with oil. Oil futures are trading below $50 per barrel this week.

In weekly options for BP there are traders taking at-the-money positions at the 36 strike as the stock trades $36. Options contracts are considered expensive with an implied volatility of 44, the average implied vol during the past few months is 29.

Earnings after the close are coming from Bed, Bath & Beyond (BBBY), and traders appear to be preparing for a rude awakening. The stock is trading $78 and traders are bracing for a potential downward move. Put strikes are active at 71, 71.5, 73, 74, and 75. Implied volatility is high at 135. The straddle at 78 suggests a move up or down of $5.00. It will be interesting to see if there is more of put pile on today or if call buyers emerge.

Alcoa is active this week in the Weeklys ahead of earnings Monday. As AA trades $15 weekly calls are active at the 15 and 16 strike.

Onto other big movers this week….

Arena (ARNA) gained 76% yesterday on positive data on its autoimmune treatment as well as hopes for what’s in the pipeline. Today shares trade $5.30 and in weekly options 6 calls are moving along with puts in the 5 and 5.5 strikes.

That leads me to biotech Gilead Sciences which has traders on their toes this week. GILD is back above $100 and call buying is brisk with much of the action in the 100 and 101 strikes. There are a few put players at the 99 strike.

Herbalife had a 4% rally yesterday (and again today) despite recent comments from activist investor Bill Ackman that the company will implode. Herbalife execs suggests Ackman’s put options are expiring next week and that’s behind his negative comments. As HLF trades $32 puts are in play in the Weeklys expiring Friday at 27, 28 and 29.

A quick check on Apple into Friday’s expiration. Apple traders are extra busy today as more than 266,000 contracts have already traded today. As AAPL trades $110+, calls are in focus at 109 up to 112. Puts are light compared to calls, there is some action including the 108 put strike. Mostly calls today.

The S&P (SPX) is rallying strongly into the jobs report Friday, but there are traders seeking protection in the 1,975 and 2,000 strike weekly puts. On the other side, there are call players at the 2,050 and 2,070 strikes.

That’s it for now. I’m Angela Miles.