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Saturday, December 2, 2023

Bullish Activity Detected In Staples Options

SPLS – Staples, Inc. – Office supplies retailer Staples popped up on our market scanners this morning following a burst of activity in November expiry call options. Shares in SPLS have been moving steadily higher throughout the session, with the stock currently up 1.4% on the day at $14.95 as of 12:35 p.m. ET.

The most traded options contracts on Staples today are the Nov $16 strike calls, with roughly 7,000 contracts purchased at a premium of $0.20 each just after 10:00 a.m. ET this morning. The position makes money at expiration if shares in the retailer rally more than 8.0% over the current price of $14.95 to exceed the breakeven point at $16.20. The Nov $16 calls expire one week prior to the company’s third-quarter earnings report on November 20th.

Finally, the Nov $15 strike calls were also active this morning, with around 800 lots purchased at a premium of $0.50 each at almost the exact same time as the $16 calls were purchased. 

CCL – Carnival Corp – Shares in the world’s largest cruise operator are sinking today, down as much as 8.0% during morning trading to $34.43, after the company forecast fourth-quarter earnings below analyst estimates.

Put options purchased during the final 30 minutes of the trading session on Monday appear to have generated sizable overnight profits for at least one options strategist today. Open interest in the Oct $37 puts increased by around 1,250 contracts following the prior trading session; a review of time and sales data from Monday afternoon suggests much of the interest, roughly 1,100 contracts, was purchased at a premium of $0.85 each. The dip in shares of CCL today nearly tripled the value of the $37 puts, lifting premium on the contracts up to $2.50 per contract during the first half of the session on Tuesday.

Overall options volume on the stock is up sharply versus CCL’s average level, with more than 14,500 contracts traded as of 11:30 a.m. ET as compared to Carnival’s average daily volume of around 1,800 contracts. Trading in CCL puts is outpacing that of calls, driving the put/call ratio to 1.9 at last check. 

YHOO – Yahoo! Inc. – Shares in Yahoo rallied nearly 4.0% near the open on Tuesday to $31.40, the highest level since 2007, sparking heavy trading in weekly call options on the stock.

The most traded Sep 27 ’13 contracts as of the time of this writing are the $31 strike call options, with more than 12,500 lots in play versus open interest of 891 contracts. Time and sales data indicates a large print of 5,916 contracts traded to the middle of the market at a premium of $0.45 each, while some 3,000 calls were purchased at an average premium of $0.44 apiece. Buyers of the $31 strike calls stand ready to profit at expiration this week in the event that YHOO shares exceed the average breakeven point at $31.44. The Sep 27 ’13 $32 strike calls are also active today, with roughly 1,300 calls traded against open interest of 459 contracts. Much of the volume appears to have been purchased at an average premium of $0.21 each. The $32 weekly calls may be profitable at expiration if shares in Yahoo rally 2.6% over today’s high of $31.40 to exceed the average breakeven price of $32.21. 

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