Bullish Signals

A trader bought 1,625 INFI Dec 15 Calls for $1.90 (3.0 times usual volume) with stock at $14.16
A trader bought 1,000 CIM Dec 3 Calls for $0.15 (3.4 times usual volume) with stock at $3.02
A trader bought 4,000 RHI Nov 40 Calls for $1.25 (31.9 times usual volume) with stock at $39.43
A trader bought 2,200 MAR Oct 43 Calls for $0.20 (3.1 times usual volume) with stock at $42.27
A trader bought 1,700 ASH Nov 95 Calls for $1.14 (3.1 times usual volume) with stock at $88.60

Bearish Signals

A trader bought 1,200 AKG Nov 2.5 Puts for $0.45 (5.5 times usual volume) with stock at $2.13
A trader bought 1,383 ZMH Oct 85 Puts for $0.25 (3 times usual volume) with stock at $87.35
A trader bought 2,100 LTD Oct 55 Puts for $0.20 (3.5 times usual volume) with stock at $56.90
A trader bought 7,000 WFM May 55-52.5 Put Spreads for $0.70 (2.7 times usual volume) with stock at $61.76

Unusual Option Activity

A trader bought 2,200 MAR Oct 43 Calls for $0.20 (3.1 times usual volume) with stock at $42.27
A trader bought 1,700 ASH Nov 95 Calls for $1.14 (3.1 times usual volume) with stock at $88.65
A trader bought 2,100 LTD Oct 55 Puts for $0.20 (3.5 times usual volume) with stock at $56.90
A trader bought 7,000 WFM May 55-52.5 Put Spreads for $0.70 (2.7 times usual volume) with stock at $61.76
A trader bought 2,200 MAR Oct 43 Calls for $0.20 (3.1 times usual volume) with stock at $42.27

Long Term Trade of the Day

Energen Corporation (EGN) is an energy holding company that operates in the development, exploration and production of oil and natural gas in the U.S. The company’s stock is currently trading around $81.65 in a 52 week range of $41.38-$82.70. The stock has been massively outperforming the market this year, rallying nearly 81% year to date. Options traders seem to believe this run can continue as we have seen extremely bullish unusual option activity in EGN this morning. A large 4 legged spread traded this morning as a trader sold 2,500 Jan 70 puts and 2,500 Jan 60 puts for $1.05 and $0.20 respectively. A 5,000 lot of the Jan 80-100 Call spreads bought for $3.35 were also tied to this order. This is a very bullish order and shows a high level of conviction. This trade is taking on a huge amount of risk to put this position on. We believe that this is a great signal to get long EGN. We will look at a trade that has a better risk vs. reward set up than the block trader got.

Trade: Buy the EGN April 85-95 Bull Call Spread for $3.00
Risk: $300 per 1 lot
Reward: $700 per 1 lot
Breakeven: $88.00

EGN

Swing Stock Trade of the Day

GNC Holdings Inc (GNC) is a specialty retailer of health products in the U.S. and 54 countries around the world. The company’s stock is currently trading around $55.45 in a 52 week range of $30.92-$55.85. GNC has had a huge run this year, rallying over 66% year to date. Unusual option activity we have seen in GNC today tells us that traders believe there is more upside in store for GNC.  Earlier in today’s trading session a trader bought 2,000 GNC Nov 55 calls for $2.75. This would indicate that this trader believes the stock will head higher through November expiration.  The daily chart of GNC also supports the case for a long in the stock. GNC is trading well above the Ichimoku cloud and the cloud is upward sloping into the future. All of these factors are lining up for a long position in GNC stock.

Trade: Buying GNC stock at $55.45 with a stop at $51.21
Risk: $4.24 per share
Target #1: $57.60
Target #2: $59.70
Target #3: $63.90

gnc

Covered Call Trade of the Day

Allied Nevada Gold Corp (ANV) is a gold and silver miner in the state of Nevada. The company’s stock is currently trading around $4.15 in a 52 week range of $3.54-$41.02. The stock has been in free fall for most of the year, losing over 86% year to date. Despite the weakness the stock has shown this year we have seen some bullish unusual option activity in ANV today. Earlier in today’s session we saw a trader sell 2,300 of the ANV Dec 4 puts for $0.45. This is a very bullish trade and indicates that this trader strongly believes shares of ANV will be above $4.00 on December expiration. Although the chart is very weak in ANV, this high conviction bet signals the opportunity for a covered call in ANV. This trade will profit if ANV rallies, trades sideways, or even sells off to anywhere above $3.50.

Trade: Buying 100 shares of ANV at $4.15 for every Dec 4 Call sold for $0.65
Reward: $50 per 1 lot
Breakeven: $3.50

Should shares of ANV close above $4.00 on December expiration this trade will net its maximum potential profit of $50 per 1 lot. This trade is also profitable anywhere above $3.50. If the stock closes above $4.00 on expiration this trade will net an annualized return of 109.40%.

ANV

Earnings Trade of the Day

Intel Corporation (INTC) is a designer and manufacturer of digital technology platforms consisting of microprocessors and chipsets.  The company’s stock is currently trading around $23.50 in a 52 week range of $19.23-$25.98. The stock has rallied nearly 14% year to date but is only higher by 7.8% over the past 12 months. INTC is scheduled to report their most recent quarterly earnings today after the bell.  The stock has been relatively weak on earnings day over the past 8 quarters. The stock sold off on earnings day 5 of the past 8 quarters with an average move of 2.7%. The options market is currently implying a move of just over 4% by this Friday’s expiration.  This is a large implied move relative to the historical average and can present an opportunity. Knowing the stock only moves 2.7% gives a trader the chance to sell the implied move in INTC. We can approach this in several different ways, but the trade outlined below offers the most efficient and risk controlled way to fade movement in INTC. This trade has a trader short premium and implied volatility but does not have the risk of blowing out an account.

 

Trade: Selling the INTC Oct 23.5 Straddle to Buy the Oct 22-25 Strangle for $0.80 Credit
Risk: $70 per 1 lot
Reward: $80 per 1 lot
Breakeven: $22.70 and $24.30

INTC