A trader bought 2,500 RLGY Dec 50 Calls for $0.80 (2.3 times usual volume) with stock at $43.46
A trader bought 1,500 TRMB Nov 30 Calls for $0.50 (9.1 times usual volume) with stock at $28.72
A trader bought 10,000 MAS Jan 26 Calls for $0.25 (5.4 times usual volume) with stock at $21.06
A trader bought 18,965 XLP Dec 43 Calls for $0.44 (3.5 times usual volume) with stock at $42.52
A trader bought 10,000 PBR Jan 20 Calls for $0.21 (2.8 times usual volume) with stock at $17.31

A trader bought 969 HW Dec 9 Puts for $0.50 (7 times usual volume) with stock at $9.47
A trader bought 1,500 MOVE Nov 15 Puts for $0.20 (13.4 times usual volume) with stock at $17.29
A trader bought 2,500 DOLE Dec 12-10 Put Spreads for $0.07 (9.7 times usual volume) with stock at $13.69
A trader bought 1,000 ECL Nov 105 Puts for $2.30 (5.7 times usual volume) with stock at $104.34

A trader bought 10,000 MAS Jan 26 Calls for $0.25 (5.4 times usual volume) with stock at $21.06
A trader bought 18,965 XLP Dec 43 Calls for $0.44 (3.5 times usual volume) with stock at $42.52
A trader bought 10,000 PBR Jan 20 Calls for $0.21 (2.8 times usual volume) with stock at $17.31
A trader bought 1,000 ECL Nov 105 Puts for $2.30 (5.7 times usual volume) with stock at $104.34
A trader bought 1,500 MOVE Nov 15 Puts for $0.20 (13.4 times usual volume) with stock at $17.29

Resolute Energy Corporation (REN) is an oil and gas company that is engaged in the exploration and acquisition of oil and gas properties in the U.S. The stock is currently trading around $9.50 in a 52 week range of $7.41-$11.56. The stock has rallied over 16% this year and recent order flows in the options market lead us to believe there could be more upside in REN to come. Last week a trader bought 2,000 REN Nov 10 calls for $0.35. While this may not be a huge order, action in the U.S. gas and oil space has been indicating that traders expected significant upside in the industry. Most of the options action points to these stocks heading higher through the end of the year and we believe that REN sets up well here for a long term buy.  We will look to use deep in the money calls as a stock replacement strategy. This allows a trader to use the inherent leverage of options to take a long view on REN in a much more capital efficient way than simply buying the stock. (more…)

A trader bought 1,000 EVEP Dec 40 Calls for $0.60 (2.1 times usual volume) with stock at $36.77
A trader bought 7,500 XCO Jan 7 Calls for $0.45 (7.9 times usual volume) with stock at $6.62
A trader bought 2,100 OLN Dec 25 Calls for $0.25 (4.8 times usual volume) with stock at $22.23
A trader bought 2,500 LYB Nov 80 Calls for $0.60 (2.9 times usual volume) with stock at $75.81
A trader bought 3,000 AVP Nov 23 Calls for $0.45 (2.9 times usual volume) with stock at $21.74

A trader bought 4,110 SEE Jan 17.5 Puts for $0.70 (7.6 times usual volume) with stock at $28.45
A trader bought 1,500 LH Nov 97.5 Puts for $0.70 (11.3 times usual volume) with stock at $99.97
A trader bought 4,300 SAP Jan 77.5 Puts for $2.50 (2.4 times usual volume) with stock at $79.51
A trader bought 6,300 GRA Mar 90 Puts for $5.80 (9 times usual volume) with stock at $91.45

A trader bought 1,500 LH Nov 97.5 Puts for $0.70 (11.3 times usual volume) with stock at $99.97
A trader bought 4,300 SAP Jan 77.5 Puts for $2.50 (2.4 times usual volume) with stock at $79.51
A trader bought 6,300 GRA Mar 90 Puts for $5.80 (9 times usual volume) with stock at $91.45
A trader bought 2,500 LYB Nov 80 Calls for $0.60 (2.9 times usual volume) with stock at $75.81
A trader bought 3,000 AVP Nov 23 Calls for $0.45 (2.9 times usual volume) with stock at $21.74

Sanmina Corporation (SANM) provides integrated manufacturing solutions to original equipment manufacturers in a number of different industries. The company’s stock is currently trading around $16.85 in a 52 week range of $7.58-$18.44. The stock has been performing very well this year, outpacing the broader market, rallying over 52% year to date. Unsual options activity in yesterday’s trading session suggests that traders believe this trend in SANM will continue through the end of November. In midafternoon trading yesterday a trader sold 2,500 SANM Nov 16 puts for $0.60. This is a very bullish trade as this trader is accepting large amounts of risk in hopes shares of SANM stay above $16.00 through November expiration. SANM is rallying today on the back of the bullish activity from yesterday. The stock is also trading well on a chart with the Ichimoku Cloud suggesting there could be more upside in store for SANM. We believe that these signals provide a great opportunity for a covered call in SANM. (more…)

Sirius XM Radio Inc (SIRI) is a satellite radio company broadcasting music, sports, comedy and news through a subscription based model. The stock is trading around $3.96 in a 52 week range of $2.55-$4.18. The stock has been performing very well this year, outperforming the broader market, rallying over 38% year to date. Recent usual options activity in SIRI suggests that the stock could continue its rally through the end of the year. Early in yesterday’s trading session a trader sold 32,000 SIRI Nov 4 puts for $0.07. This is a very bullish trade that obligates this trader to buy 3.2 million shares of stock on expiration anywhere below $4.00. This provides us with a great setup for a covered call.

Trade: Buying 100 shares of SIRI for $3.96 for every Nov 4 call for $0.10
Reward: $14 per 1 lot
Breakeven: $3.86

If the stock is above $4.00 on expiration this trade will net its maximum profit of $14 per 1 lot. This trade also profits anywhere above $3.86. Should the stock close above $4.00 on expiration this trade will net an annualized return of 79.8%.

Zoetis Inc (ZTS) develops and commercializes animal health medicines for animals. The stock is currently trading around $32.65 in a 52 week range of $28.81-$35.42. The stock has rallied over 5% year to date but is still underperforming the broader market.  Options action in ZTS is suggesting that the stock could head higher through April of next year. In today’s trading session a trader bought 1,400 ZTS Apr 35 calls for $1.25. This trade will make the Apr 35 call line the largest open interest in April. This is a bullish trade that suggests this trader believes the stock will be above $25.00 on April expiration. The stock is also trading in bullish territory technically. Shares of ZTS are trading above the Ichimoku Cloud indicating there could be more upside in ZTS. We believe that this technical strength and the unusual options activity provide a great set up for a swing trade in ZTS

Trade: Buying ZTS Stock at $32.65 with a stop at $30.21.

Risk: $2.44 per share

Target #1: $33.87

Target #2: $35.09

Target: #3: $37.53