Avon Products, Inc. (AVP) is a manufacturer and marketer of beauty and related products. The Company’s product categories are Beauty and Fashion & Home. Beauty consists of color, fragrance, skincare and personal care.  AVP is currently trading around $12.62 in a 52 week range of $12.65 – 22.86. The company’s stock has been underperforming the market this year with shares decreasing 26.48% year to date. Today, a trader bought 6880 AVP Nov14 12.0 Puts for $0.45. This order involves this trader laying out over $300,000 in total premium. AVP is trading at its 52 week low, and this position more than likely indicates that this trader believes the stock is headed even lower. As the common adage goes, ‘The trend is your friend’, and the stock is trading below the Cloud, meaning this trader is banking on more downside for AVP.

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/1usQnKR or through the only Unique Unusual Options Activity Scanner: http://bit.ly/1sCSaws

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.

The Trade:
Buying the 6880 AVP Nov14 12.0 Puts for $0.45
Risk: $45 for every 1 lot

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

6880 AVP Nov14 12.0 Puts $0.45

T-Mobile US, Inc. provides mobile communications services under the T-Mobile, MetroPCS, and GoSmart brands in the United States, Puerto Rico, and the U.S. Virgin Islands. It offers postpaid and prepaid wireless voice, messaging and data services, and wholesale wireless services. TMUS is currently trading around $28.50 in a 52 week range of $24.90 – 35.50. The company’s stock has been underperforming the market this year with shares decreasing 15.21% year to date. Today, a trader sold 16700 TMUS Oct14 27.0 Puts at $0.28. This order involves this trader collecting just over $460,000 in total premium credit. This position could be a hedge on short stock, or bullish speculation on the upside. TMUS trades an average 1.4 million shares day, and this order controls 1.6 million shares. This indicates a very strong support level at $26.72, since any close lower than the 27 strike will force this trader to buy stock. TMUS is trading below the Ichimoku Cloud, indicating that price momentum could be pushing the stock lower, however, put selling is one of the strongest bullish indicators of Unusual Option Activity.

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/1usQnKR or through the only Unique Unusual Options Activity Scanner: http://bit.ly/1sCSaws

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.

The Trade:
Selling the TMUS Oct14 27.0 Puts at $0.28
Risk: Stock going to $0

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

Jabil Circuit, Inc. (JBL) is a provider of worldwide electronic manufacturing services and solutions. Jabil provides electronics design, production and product management services to companies in the aerospace, automotive, computing, consumer, defense, industrial, instrumentation, medical, networking, peripherals, solar, storage and telecommunications industries.  JBL is currently trading around $20.78 in a 52-week range of $15.30 – 24.13. The company’s stock has been outperforming the market this year with shares increasing 19.14% year to date.

The electronics manufacturer is scheduled to announce earnings today after the bell. In July, Jabil Circuit announced its Board of Directors had authorized the repurchase of up to $100 million worth of shares of the company’s common stock. CFO Alexander Forbes was quoted during the last conference call saying, “Our third fiscal quarter performed largely as planned and is highlighted by a strong balance sheet performance, driven by significant cash flow from operations and a total cash position of $1.3 billion. We believe the strength of our balance sheet positions us well as we consider strategic investments in key growth areas in fiscal 2015.” While the expectations of management might be positive, the historical data tells a slightly different story.

Historical data shows that for the past 8 earnings reports, JBL has moved an average of 7.4%, with 5 out of 8 last reports moving the stock to the downside. The near-term at-the-money straddle is implying a 8.3% move in the stock. By comparing historical data to current implied data, we can infer that implied volatility is 1% higher than the historical mean, suggesting more tension and increased interest in JBL options. Accounting for historical vs. implied data, we are neutral-to-bearish on this name. Browse our , with a variety of options to suit every taste and budget, available to buy online.

DISCLAIMER:

Yahoo! Inc. (Yahoo!) is a global technology company. Through the Company’s technology and insights, Yahoo! delivers digital content and experiences, across devices and globally. The Company provides online properties and services (Yahoo! Properties) to users, as well as a range of marketing services designed to reach and connect with those users on Yahoo! and through a distribution network of third-party entities (Affiliates). YHOO is currently trading around $38.88 in a 52-week range of $30.02 – 44.01. The company’s stock has been underperforming the market this year with shares declining 3.58% year to date.

YHOO shares have sold off recently in light of the Alibaba IPO. On Monday, a whopping 106 million Yahoo shares changed hands, almost triple the daily average. YHOO owns 22% of BABA, and investors are using YHOO to hedge against a possible downward movement in BABA. BABA has yet to become optionable, and traders are either selling stock short, or buying puts on YHOO to hedge their long BABA positions. We believe that this downward move in YHOO is temporary, and have gotten bullish on the stock

The Trade: Buying the YHOO Nov 40-43-46 Call Fly for $.42 debit

Risk: $42 per lot

Reward: $2.58

Greeks Of The Trade

Delta: Long

Gamma: Long

Theta: Short

Vega: Long

BBBY reports earnings after the bell today, and investors are eager to see what the home furnishing’s giant has in store.

Bed Bath & Beyond Inc. is a chain of retail stores, operating under the names Bed Bath & Beyond, Christmas Tree Shops, Harmon and Harmon Face Values, buybuy BABY and World Market or Cost Plus World Market. The Company sells a range of domestics merchandise and home furnishings.  BBBY is currently trading around $62.76 in a 52-week range of $54.96 – 80.82. The company’s stock has been underperforming the market this year with shares declining 21.66% year to date.

Morgan Stanley’s home-furnishings survey conducted in August was released Monday, and found almost 80% of shoppers at Bed, Bath & Beyond in the past three months listed the company’s 20% off an-item coupon as what drove them to the store, much higher than other factors including selection or quality of merchandise. Analysts surveyed by FactSet estimated the company earned $1.14 a share, down from $1.16 a share. The retailer in June cut its profit outlook for the second quarter to $1.08 to $1.16 a share. Increased usage of coupons and online spending are expected to be hurt profit margins.

Historical data shows that for the past 8 earnings reports, BBBY has moved an average of 6.1%, with 6 out of 8 last reports moving the stock to the downside. The near-term at-the-money straddle is implying a 6% move in the stock, which is right in line with past performance.

DISCLAIMER:

There was no mixed message in stocks yesterday, with a bounce from bottoming on higher lows in two of the three major markets.  The shorts got shocked with a rebound, back above the resistance half way point of the sell off from record highs.

The discount sale in tech was short lived, with a .9% jump in the NDX Nasdaq 100, up 37 points at 4067, gaining back almost all of Monday’s drop.  The NDX is a mere 44 points away from recent record September 9^th at 4111.

Zillow was a big gainer, plus 6% to $133.26, bouncing of the 120 level once again this week.  Z has record highs at $165, and had fallen after merger talks with Trulia earlier this summer.   The January $150 call traded almost 900 contracts.

The DOW gained triple digits, with a .6% rally to 17,132.  The DOW total is now plus 3.35% for 2014, closing in on all time highs in the blue chips.  Only one stock, NIKE, was negative on a bright green day.

Dupont saw heavy option volume, 4 times normal, trading on the call side for the second day in a row and closing up .8% at $65.83.  DD has been stuck largely between $67 and $64 since late June.

The broad market S&P SPX index pushed above the Y2K mark intraday, peaking at 2002 to close at party like it’s 1999.  The gain was 15 points, .75% on the day, to put performance back plus 8% YTD.

New relative highs pushed the VIX month and half midpoint pivot, with highs at $14.53 early before the downward fall to $12.73, on a nearly 10% daily decline.  Support sits at $11.24 from August 25^th the lowest level in the last two months.

The last day of September expiration VIX options traded over 1,100,000 contracts, more than twice the normal volume.  The October $21 and $17 calls were the most active deferred month options.

JCP also had call action with the October 10^th weekly $11 calls 5500 lots at the ask around $.50.  JC Penny closed at $10.90, putting the option expiration break even 5.5% higher.

Ford has fallen from the $18 mark end of July to close at $16.52 Tuesday.  After a dip to $16.16 lows, F saw call buyers in the SEP $16.50’s nearly 5000 contracts for $.11.  Those options are now in the money, but the level to watch is the expiry break even at $16.61.

Stocks to watch this morning include:

Adobe beat the street by $.02 with earnings numbers yesterday afternoon, but the pre market has shares down 4% at $67.50 this morning

Lennar is plus 5% after announcing EPS of $.78 versus $.67 expected and revenue above estimates

The aforementioned Dupont, which had unusual call option activity, is plus 4% as investors are talking about a company breakup to unlock value.

Overseas markets have The Nikkei in Japan -.1%.  Europe is green with the DAX in Germany plus .4% and the FTSE in London up .1%.

Stock index futures prices are steady, with the Emini S&P unchanged and little over 10 points from the all time December contract highs.  The Dow futures are 5 points higher here this morning with an hour to go before the open of the cash stock market.

Monday’s markets were mixed as investors ponder the Fed meetings this week

Tech turned lower with the upcoming ALIBABA IPO.  The NDX Nasdaq 100 index lost 1% to 4030, dropping 39 points, lowering YTD performance to plus 12%.

AMZN lost 2.2% to $324 on 1.4 times normal option volume on 55% put action.  The September $320 puts were active, trading 5500 contracts with new long positions expiring Friday.  AMZN is also down 19%.

DOW stocks were the winners, with a 44 point gain back above 17,000.  About 2/3 of the index components were in the green, with PFIZER leading the day plus 1.7%, closing just under $30.  PFE was the number 10 most active equity option, trading 104,000 contracts on 68% calls, bringing the stock to -2% for 2014.

The broad market S&P recovered from new relative lows with an unchanged percentage close, down 1 point at 1984 in the SPX.  A peek into the positive late in the day was noted against a backdrop of the tech tumble.

The VIX ignored the S&P price indifference jumping 6% to $14.12.  $14.50 is the midpoint resistance to watch on a weekly basis of the $17.57 August 1 peak and the August 24^th$11.24 low.

VIX options traded 1.4 times normal activity, 725,000 contracts with 77% calls ahead of the last September expiration day today.  The October $20 calls traded 40,000 lots, though the VIX hasn’t been at that level since February.

BHP Billiton has been digging a hole, down 12% from the July 29^th 52 week high, to close at $64.61.  20,000 of the October $60 puts established new positions against open interest of 137.  These positions could represent a protective hedge or speculative short.

Stocks to watch this morning include:

Sears Holding borrowed 400 million dollars from CEO Eddie Lampert’s Hedge Fund.  A little cash infusion can’t hurt, with SHLD down 2% yesterday

TESLA was down 9% yesterday, and had an analyst saying to buy to dip. TSLA is still up 70% YTD, with early morning action positive .5% today

Humana looks to get healthy and strong with a 2 billion dollar stock buyback plan.  HUM is up half .5% at $128.50 in the pre market.

Overseas, markets are red with The Nikkei in Japan minus .25%.  Europe is also down with the FTSE in London, and the DAX in Germany off .3%.

The RSX Russia Market Vectors ETF saw a huge out of the money September 26^th weekly put play.   64,000 of the $22.50 puts traded for $.10 as the index closed at $24.11, 6% above the strike with only two weeks until expiration.

Stock index futures prices are steady to weaker with the Emini S&P minus 2 points.  The Dow futures are 15 points lower here this morning with an hour to go before the open of the cash stock market.

Last week was characterized by losses for the first time in over a month, as stocks slid on a weekly basis.  The five days finished in the red to quash any hopes of a Friday recovery.

Volatility, as measured by the VIX, peaked Friday at $14.27 the highest level since August 15^th before backing down at the close at $13.31.  The weekly run was more than 10%, with the $14.50 price above the midpoint resistance of the recent high-to-low over the last six weeks.  Option action had 1.7x normal activity with 79% calls traded on the day.  Over 135,000 of the Oct $22 calls were in play, with the out of the money strike a full 50% above the close.

The S&P price weakened Friday, losing 12 points at 1985 with a session low at 1980, the deepest depth since August 20^th.   The SPX marked a 1.1% loss on the five days, with no new highs posted.

VLO dropped 8.5% on the week, closing under $50 for the first time in over a month at $48.82, off 2.85%.  Valero is still up 38% over the last 52 weeks.  New long positioning in the September 26^th weekly $49.50 puts 10,000 lots at $1.10 puts in a price floor, or could be looking for more downside in the next two weeks.

The DOW finished 50 off the day’s low, but still posted a loss of 61 points to close under 17,000 at 16,987.  The loss for the week was 150 points in the blue chips, off .9%.

Citigroup added .3% Friday at $52.38 to stay above the Mendoza line on a .5% gain for 2014.  99,000 C options traded, which was 1.4x normal activity and action in the October 3^rd weekly’s around $.35.

The Nasdaq 100 NDX was off .5% Friday, down 23 at 4069.  A weekly key reversal had the NDX post a new high Tuesday at 4110, with a negative close down 20 points over the five days.

EBAY bounced back 3% to $52.19 with option activity 4.4x normal volume, trading 217,000 contracts on 76% calls.  Over 8000 of the October $55 calls were scooped up at the ask, as new long positions were established at around a $1 premium.

Stocks to watch this morning include:

YHOO is up another 1% in the pre market to new highs, after an 8% surge last week, as the Alibaba IPO gets closer.  Yahoo is closing in on prices not seen since the 2000 internet bubble

Apple is a dollar and a half from its record peak, plus .5% at $102.20 this morning, asa  result of iPhone 6 sales results

YUM brands owner of Pizza Hut and Taco Bell host their investor conference today.  Yum shares are down 5% YTD with persistent China woes.

Overseas markets have The Nikei in Japan +.25% to start the week.   Europe in steady with the FTSE in London unchanged and the DAX in Germany up .2%.

Stock index futures prices have rebounded from sharply negative overnight selling, with the Emini S&P minus 2 points.  The Dow futures are 10 points lower here this morning, with an hour to go before the open of the cash stock market.

Gapping lower at the open, yesterday’s session saw the major markets back to near unchanged territory on a mixed day.  Higher index lows Thursday versus Wednesday were a positive sign to end the trading week.

The broad market S&P 500 SPX added nearly 2 points to 1997 ½ for a .1% gain.

As the epic, year long channel battle continues from $14 to $12, volatility slid little more than .5% with the VIX closing at $12.80 yesterday, after peaking at $13.67 .  VIX options traded 557,000 contracts in line with norms, nearly 70% on the call side.  The September $16 calls and October $18 calls were most active on more than 40,000 lots at each strike.

With Crude Oil marking new 16 month lows, the XLE Energy ETF pushed to its lowest level since May, before rebounding to close positive at $94.98.  XLE options saw a roll down and out, selling the October $95 puts to buy the November $92 puts.  The $92 strike is 3% below, with the XLE index up more than 7% in 2014.

Tech on the other hand lost 2 points, as the NDX Nasdaq 100 index couldn’t quite get back to closing on its highs at just under 4093.

Blackberry blazed up 5% to $10.78 with an acquisition announcement yesterday, as front month September expiration had buy to open activity in the $10 and $10.50 strikes.  59,000 BBRY options traded, with 81% on the call side.

Dow 30 stocks saw a 50/50 split with the index losing 20 points, down to 17,049, with a .1% drop.    For the second day in a row, blue chips dipped to under 17,000 during the session, but managed to meander back above 17,000 by the day’s end.

Coca Cola backed off .5% to just under $42, but the stock is holding strong, with a 6% upside performance in the last month alone.  January $44 calls were in play, mostly as new long buys around $.45 for more than 6000 contracts.

Stocks to watch this morning include:

Twitter is looking to raise up to 1.3 billion dollars in a bond offering.  Borrowing now, when interest rates are low, may be a sign they have some acquisition in mind.  TWTR is .25% at $52.75, as the total cash hoard would be 3.5 Billion including their spare change on hand.

Tesla giga factory in Nevada was approved by state legislators, signing off on tax incentives for car maker.  TSLA sits unchanged at $280 ½, with the record up above $290.

Darden Restaurants is back above $50 (+5%) as it reviews a plan to separate its food business from its real estate holdings. Sources say it could double DRI value to $100.

Overseas markets have The Nikei in Japan up .25%, leading the day once again.  Europe is mixed with the FTSE in London up .2% and the DAX in Germany -.2%.

Stock index futures prices are steady with the Emini S&P up 2 points.  The Dow futures are 10 points higher here this morning with an hour to go before the open of the cash stock market.

Lululemon Athletica inc. (LULU) is a designer and retailer of technical athletic apparel operating primarily in North America and Australia. LULU is currently trading around $43.72 in a 52 week range of $36.26 – 77.75. The company’s stock has been underperforming the market this year with shares declining 25.96% year to date.

For the quarter, LULU delivered a 13% increase in net revenue to $390.7 million as total comparable sales, which includes retail locations as well as online sales, were flat on a constant currency basis. Physical same-store sales dipped 5%, while comparable direct to consumer revenue rose 30% year-over-year. Net income for the quarter totaled $48.7 million, or an adjusted $0.33 per share, down from $56.5 million, or $0.39 per adjusted share in the year-ago period, while gross margin dipped 350 basis points to 50.5%. By comparison, Wall Street’s consensus expectation had called for $376.8 million in revenue and just $0.29 in EPS.

Lululemon also adjusted its full-year sales and earnings guidance. The company is now forecasting revenue of between $1.78 billion and $1.8 billion based on total comparable sales in the low-single-digits, and anticipates adjusted EPS will be in the $1.72 to $1.77 range. Both figures are in-line with current Wall Street forecasts.

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.