The Technology Select SPDR (XLK) is up over 6.5 percent YTD in 2013, with shares thus far proving unable to breakthrough the $32.50 level.  XLK shares have consistently made new highs since breaking through $28 in February of 2012.  Top holdings of the ETF include Apple (12.43%), Microsoft (MSFT, 8.68%), Google (GOOG, 7.91%, IBM (IBM, 6.66%), and AT&T (T 6.37%).  Verizon (VZ), Cisco (CSCO), Oracle (ORCL), Qualcomm (QCOM), and Intel (INTC) round out the ETF’s top 10 holdings, which comprise 62 percent of its assets.

Traditionally, the fourth quarter is one the strongest for tech, as enterprise customers and IT executives rush to spend discretionary budget and capitalize on year-end discounting.  This is important, as IT departments usually will lose whatever budget is left unused in the next fiscal year.  At the same time, companies whose fiscal calendars coincide with the calendar year will discount more aggressively than usual to add last minute sales to the book.

Today, we saw a trader buy 25,000 XLK Sep (27th) Weekly 33 Calls for $0.05 – $0.06.  This trader will make money should XLK shares trade anywhere above $33.06.

Our Trade:
Buy the XLK Sep (27th) Weekly 33 Calls for $0.07
Risk: $7 per 1 Lot
Reward: Theoretically Unlimited
Break-even: $33.07

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

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 think 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.

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 think 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.

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 think 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.

Trade:
Buying the FIVE Sep 40-35 Put Spread for $1.50
Risk: $150 per 1 lot
Reward: $350 per 1 lot
Breakeven: $38.50

Thompson Creek Metals Company (TSX: TCM NYSE: TC), the Toronto, Ontario based molybdenum mining company, owns two operational mines and five more in the developmental stage.

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