MBIA (MBI) financial services company that is currently trading at $12.23. MBIA is trading in in a fifty two week range of $11.96-12.78. The stock has been slightly under performing the market with shares rallying 2.57%. Options traders seem to think the stock will stay above $12. We saw 1800 June 12 puts being sold for .33 cents. By selling puts, this trader is obligated to buy the stock if it is at or below the $12 strike before expatriation. If the stock stays at $12 or above, the trader will keep the $59,400 in premium. As long as the stock stays above $11.65 by June expiration, this trader will make money off the premium sold. A trader believes that (MBI) is setting up to stay above $12 strike before June.

Yahoo (YHOO) internet search giant and major shareholder of Alibaba, is currently trading at $34.53. Yahoo (YHOO) is currently trading in a $23.82-41.72 fifty two week range. Yahoo has been under performing the market as shares have fallen 14.74% year to date. This year Yahoo has generated poor earnings performance from its core internet business. However Yahoo’s 24% stake in the up and coming Alibaba has given a boost to yahoo’s quarterly reports and stock. With Alibaba’s upcoming IPO, Options traders have a bullish outlook on Yahoo. Yesterday we saw a trader buy 19,105 YHOO Friday 5/30 weekly calls at the $34.00 strike for $1.37 premium. Yahoo is currently trading below the Ichimoku Cloud; however with the bullish order flow in Yahoo and the hype surrounding the Alibaba IPO, I believe Yahoo is setting up for a long position.

Block Trade: A trader bought 19105 (YHOO) 5/30 Weekly 34 calls.
Risk: $137 per one lot
Reward: Unlimited
Breakeven: $35.37

Tesaro (TSRO) is another biotech that is on fire this morning! Tesaro is up 16.83% this morning 5/12/14. Tesaro has been trading in a 52 week range of $22.15-51.95. Tesaro is currently trading below the ichimoku cloud at $27.67 up $3.66 today. Despite a weak chart, Tesaro is making headlines today with positive phase three Rolapitant results. Rolapitant is a new drug used to treat the side effects from chemotherapy. As I write this article (TSRO) continues to rip higher as another bull market biotech darling.

Twitter (TWTR) social media giant has bottomed near 52 week lows after it’s first two earnings misses. The stock is currently trading in a 52 week range of $29.51-74.53. Twitter looks bearish on the Ichimoku Cloud as it trades way below the cloud at $33.09. After last weeks IPO lockup period ended share plummeted more than 18%. The charts for (TWTR) are weak and fifty two week lows usually go lower. With that said, we could be near the bottom in Twitter, as the new quarter begins and all the negative news has passed. Twitter is up about a dollar today as the stock tries to climb up from the bottom.

B/E Aerospace, Inc. (BEAV) designs, manufactures, sells, and services cabin interior products for commercial aircraft and business jets in the United States and internationally. BEAV is currently trading around $98.64 in a 52 week range of $60.47-$100.25. The company’s stock has been underperforming the market this year with shares falling year to date. Options traders were aggressively bullish last week as a trader bought 3206 BEAV May 90 Calls for $.70 debit on Wednesday April 30th, 2014. Let’s breakdown their risk and how they profited $2,670,000 or 1000% Returns in less than a week.

Yesterday a trader bought 3206 BEAV May 90 Calls for $.70 debit.
Cash Outlay: $69,600

Greeks of this Trade:
Delta: Long
Gamma: Long
Theta: Short
Vega: Long

Today these Calls are trading $9.00, so let’s look at their profit:

$9.00- $.70 * 100 * 3206= $2,670,000

Unusual Option Activity:

We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.

Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial. We offer this service through our 7 hour daily LIVE trading room http://bit.ly/135QWt8 or through Premium Twitter feed with all entries, exits, and unusual options activity tweeted all day long: http://bit.ly/11f0L9u.

Order flow can however at times be deceiving. One might logically thing that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.

Full Disclaimer: I was long these Calls today and I have no position still on