A trader bought 1,434 EXEL Jan 7 Calls for $0.15 (2.2 times usual volume) with stock at $5.73
A trader bought 1,500 ILMN Jan 90 Calls for $11.50 (2 times usual volume) with stock at $99.18
A trader bought 15,000 CNP Dec 25 Calls for $0.575 (6.1 times usual volume) with stock at $24.93
A trader sold 3,750 BKS Dec 17 Calls to buy the 16-14 Put Spread for $0.46 (10 times usual volume) with stock at $15.70
A trader bought 11,000 CBST Jan 65 Puts for $2.60 (14.9 times usual volume) with stock at $71.20

Beazer Homes USA, Inc (BZH) is a home builder in 16 states in the U.S. The company designs sells and builds single and multi-family homes. Shares of the company’s stock are currently trading around $19.60 in a 52 week range of $13.91-$23.29. The stock has been performing well this year having added over 15% to share prices year to date. Unusual option activity yin BZH today would suggest that traders believe this uptrend is going to continue through the end of the year. Early in today’s session a trader sold 4,732 BZH Dec 18 puts for $0.20. This is an extremely bullish trade that also represents volume in BZH 2.1 times the average daily option volume in the name. This trade also carries a relatively high level of risk meaning this trader has a high level of conviction. Although this is a bullish trade this trader isn’t necessarily betting on the stock rallying. This trader is expressing a strong view that the stock will close above $18.00 on December expiration.  With the stock trading in bullish territory according to the Ichimoku Cloud we believe that this order provides a great signal for a covered call in BZH. (more…)

Tiffany & Co (TIF) is a company operating specialty retailers offering mainly jewelry.  The stock is currently trading around $81.05 in a 52 week range of $55.83-$83.48. The stock has had a great year having added nearly 42% to share prices this year. TIF is set to report their most recent quarterly earnings before the market open tomorrow. The stock has mixed historical performance on earnings day. Over the past 8 quarters the stock has rallied 4 times and sold off 4 times with an average move of 5.3%. However, the stock has rallied 3 times over the past 4 quarters. Technically speaking, the stock is trading in bullish territory according to the Ichimoku Cloud.  The future cloud is also upward sloping indicating a potential for more upside in TIF.  We believe the technical and historical data lines up well for a long in TIF ahead of earnings. To set up a trade we must first develop an upside target. The options market is currently implying a move of $4.60 by Friday’s expiration. We will use this implied move to calculate an upside target of $85.65 and set up a trade. (more…)

iShares iBoxx $ High Yield Corporate Bond ETF (HYG) is an exchange traded fund seeking to track the performance of an index of high yield U.S. corporate bonds. Shares of HYG are currently trading around $93.00 in a 52 week range of $88.27-$96.30. HYG has had a relatively flat year with shares losing only 0.35% year to date. Options action in HYG today would suggest that traders believe this sideways action will continue. Early in today’s session a trader sold 10,000 of the Dec 92-93 Strangles for $0.88. This means they are expecting the stock to trade in a range between $92.00 and $93.00 on December expiration. This block also represents volume 3.2 times the average daily option volume in HYG. We believe that this order is big enough to signal as a set up for an iron condor in HYG. By using an iron condor we are not exposing ourselves to the extremely high levels of risk short strangles come with. Here we are still able to set up a great risk to reward ratio with a slight downward directional bias and no risk of unlimited losses. (more…)

A trader bought 12,328 KNK Jan 37.74 Puts for $0.15 (6.1 times usual volume) with stock at $40.50
A trader bought 1,000 DXCM Dec 30 Puts for $0.42 (3.1 times usual volume) with stock at $32.40
A trader bought 1,000 RWT Jul 15 Puts for $0.50 (3.7 times usual volume) with stock at $19.30
A trader bought 2,000 MFA Jul 6 Puts for $0.40 (19.8 times usual volume) with stock at $7.18
A trader bought 6,000 EWY Jan 61 Puts for $1.36 (3.7 times usual volume) with stock at $63.31

A trader bought 1,500 HA Apr 6 Calls for $2.30 (3.2 times usual volume) with stock at $8.22
A trader bought 2,000 MILL Feb 7.5-10 Call Spreads for $0.55 (5.1 times usual volume) with stock at $6.91
A trader bought 1,000 ATHX Jul 2.5 Calls for $0.87 (42.4 times usual volume) with stock at $2.15
A trader sold 5,000 ARIA Dec 3 Puts for $0.12 (3.1 times usual volume) with stock at $3.62

A trader bought 12,328 KNK Jan 37.74 Puts for $0.15 (6.1 times usual volume) with stock at $40.50
A trader bought 2,000 MILL Feb 7.5-10 Call Spreads for $0.55 (5.1 times usual volume) with stock at $6.91
A trader sold 5,000 ARIA Dec 3 Puts for $0.12 (3.1 times usual volume) with stock at $3.62
A trader bought 2,000 MFA Jul 6 Puts for $0.40 (19.8 times usual volume) with stock at $7.18
A trader bought 6,000 EWY Jan 61 Puts for $1.36 (3.7 times usual volume) with stock at $63.31

ARIAD Pharmaceuticals Inc. (ARIA) is a global company focused on developing medicine for cancer patients. The company’s stock is currently trading around $3.90 in a 52 week range of $2.15-$24.59. The stock has had a rough year with shares losing over 80% of their value year to date.  Despite the weakness the stock has shown this year a trader has decided to make some very bullish bets on ARIA today. Earlier in today’s trading session a trader sold 5,000 ARIA Dec 3 puts for $0.12. This block represents volume over 3 times the average daily option volume in ARIA. Short puts also carry a large amount of risk meaning this trader has a relatively high level of conviction. Essentially this trader is betting the stock will be above $3.00 on December expiration which is 28 days from now. Although the stock is trading in bearish territory technically we believe this order is large enough to serve as a signal for a covered call set up in ARIA. (more…)

A trader bought 2,323 DISCA Jan 75 Puts for $0.55 (5.3 times usual volume) with stock at $85.13
A trader bought 10,000 DNDN 1×2 Put Spreads for $0.25 (2.2 times usual volume) with stock at $2.88
A trader bought 2,000 KMR Jan 75 Calls for $1.85 (13.4 times usual volume) with stock at $75.69
A trader bought 2,000 IBB Jan 220 Calls for $4.70 (3.1 times usual volume) with stock at $213.55
A trader bought 3,100 WTI Dec 20 Calls for $0.45 (12.8 times usual volume) with stock at $19.10

A trader bought 5,500 CWH Jan 30 Calls for $0.10 (3.2 times usual volume) with stock at $23.65
A trader bought 2,000 KMR Jan 75 Calls for $1.85 (13.4 times usual volume) with stock at $75.69
A trader bought 2,000 IBB Jan 220 Calls for $4.70 (3.1 times usual volume) with stock at $213.55
A trader bought 3,100 WTI Dec 20 Calls for $0.45 (12.8 times usual volume) with stock at $19.10