Pandora Media, Inc (P) is streaming internet radio station in the United States with over 125 million registered users. Shares of P are currently trading around $20.05 in a 52 week range of $7.40-$31.94. The stock has had a great year adding over 216% to share prices year to date. P is set to report their most recent quarterly earnings report today after the market close. Historically P has been relatively weak on earnings day. Over the past 8 quarters the stock has sold off 5 times on earnings day and rallied 3 times with an average move of 14.2%. On a chart however, P is trading relatively well. Shares are trading just off their 52 week high and well above the Ichimoku Cloud. The future cloud is also upward sloping indicating there can be more upside in store for P. Options order flow has also been relatively bullish in P. On Tuesday a trader sold of the Nov 22^nd 26 puts for $0.65 indicating a strong belief that the stock will close above $26.00 on tomorrow’s expiration. With activity like this and a stong chart we believe P sets up well for a long ahead of earnings. With the options market currently implying a target of $32.15 for tomorrow’s close we will look to set up a trade at that level. (more…)

A trader bought 1,300 GA Dec 10 Calls for $0.30 (3 times usual volume) with stock at $9.23
A trader bought 2,758 FWLT Jan 31 Calls for $0.54 (3.2 times usual volume) with stock at $28.87
A trader bought 1,900 OLN Jan 25 Calls for $0.75 (3 times usual volume) with stock at $24.65
A trader bought 2,000 ARO Apr 12 Calls for $0.70 (2.4 times usual volume) with stock at $10.12
A trader bought 2,400 OI Feb 35 Calls for $0.95 (4 times usual volume) with stock at $32.93

A trader bought 2,500 GAME Dec 5 Puts for $1.10 (10.8 times usual volume) with stock at $4.10
A trader bought 5,000 ATVI Dec 15 Puts for $0.10 (4.6 times usual volume) with stock at $16.94
A trader bought 1,350 KBR Jan 34 Puts for $1.54 (3.5 times usual volume) with stock at $33.84
A trader bought 3,000 PVA Mar 7.5 Puts for $0.30 (3.3 times usual volume) with stock at $10.63

A trader bought 1,300 GA Dec 10 Calls for $0.30 (3 times usual volume) with stock at $9.23
A trader bought 2,758 FWLT Jan 31 Calls for $0.54 (3.2 times usual volume) with stock at $28.87
A trader bought 1,900 OLN Jan 25 Calls for $0.75 (3 times usual volume) with stock at $24.65
A trader bought 1,350 KBR Jan 34 Puts for $1.54 (3.5 times usual volume) with stock at $33.84
A trader bought 3,000 PVA Mar 7.5 Puts for $0.30 (3.3 times usual volume) with stock at $10.63

VirnetX Holding Corporation (VHC) is a company involved in the commercializing of portfolio patents. The company’s stock is currently trading around $19.30 in a 52 week range of $16.10-$36.84. The stock has been very weak this year with shares falling nearly 34% year to date.  Options activity in VHC suggests that traders believe this weakness will continue through the first half of next year. Earlier in today’s trading session a trader sold 9,000 Jan 2015 18 strike calls and bought 9,000 Jun 2014 25 puts for a $6.80 total debit.  This is very bearish trade that expresses this trader’s view on further downside in VHC next year. This block also traded at volume that represents 10.2 times the average daily option volume in VHC.  The chart is looking weak as well. Shares of VHC are primed to break the cloud to the downside, a key technical level that shares could tumble from if broken. We believe that both the technical and the order flow justify a long term trade in VHC to the short side. We will look for a setup more in line with our risk tolerance unlike the trade the block trader executed. We do not want any risk of blowing out. (more…)

Fifth Third Bancorp (FITB) is a financial services company with over $115 billion in assets and 1,316 banking centers throughout the Midwest United States. The company’s stock is currently trading around $20.05 in a 52 week range of $14.05-$20.21. The stock has had a great year adding nearly 32% to share prices year to date. On a chart the stock is trading well above the Ichimoku Cloud and is just off of its 52 week highs. The stock does appear to be consolidating however and the future cloud is in a region that appears to relatively neutral. Action in the options market suggests that traders believe this sideways action will continue in FITB as we have seen large sellers of straddles come in the market. Early this morning a trader sold 6,000 FITB Dec 20 straddles for $0.67. This block represents volume that is 6.4 times the average daily option volume in FITB. Short straddles are incredibly risky so we know that this trader has a relatively high level of conviction. We believe that the price action and order flow in FITB confirms the stock will be in a period of consolidation in the short term. We want to take advantage of this but do not have the risk tolerance for short straddles. Instead will use a strategy that will have us short premium and implied volatility but won’t carry the blowout risk of a short straddle. (more…)

McGraw Hill Financial, Inc (MHFI) is a company that provides credit ratings and analytics for global commodity and capital markets. The company’s stock is currently trading around $73.70 in a 52 week range of $42.07-$74.37. Shares of MHFI have been performing very well this year with shares adding nearly 35% year to date. Bullish options activity in MHFI this morning shows that options traders believe there is more upside in store for MHFI. Earlier today a trader sold 2,600 MHFI Dec 70 puts for $0.45. This block represents volume that is 3.3 times the average daily option volume in MHFI. The large amount of risk that this trader is taking on indicates the relatively high level of bullish conviction that this trader has. The stock is trading very well on a chart as well. Just off of its 52 week high MHFI is trading well above the Ichimoku Cloud with the future cloud sloping out and up. A strongly upward sloping future cloud indicates the stock may have more room to the upside. With strong technical and bullish order flows we believe MHFI is setting up well here for a covered call trade. (more…)

A trader bought 1,000 HIBB Dec 60 Puts for $1.10 (29.3 times usual volume) with stock at $63.20
A trader bought 11,000 EXC Dec 28 Puts for $0.75 (3.4 times usual volume) with stock at $27.88
A trader bought 1,085 SDR Jun 7.5 Puts for $0.70 (2.4 times usual volume) with stock at $9.18
A trader bought 2,800 SGMS Dec 17.5 Puts for $1.15 (13 times usual volume) with stock at $17.62
A trader bought 1,000 DLLR Dec 12.5 Puts for $0.525 (2.4 times usual volume) with stock at $13.20

A trader sold 2,600 MHFI Dec 70 Puts for $0.45 (3.3 times usual volume) with stock at $73.12
A trader bought 3,800 EROC Jan 5 Calls for $0.70 (4.3 times usual volume) with stock at $5.26
A trader bought 1,632 HZNP Feb 6 Calls for $0.95 (9.2 times usual volume) with stock at $5.87
A trader bought 4,700 FAST Feb 50 Calls for $1.20 (3.4 times usual volume) with stock at $46.91
A trader sold 2,700 FDO Jan 65-57.5 Put Spreads for $1.00 (2.4 times usual volume) with stock at $70.35

A trader bought 1,000 HIBB Dec 60 Puts for $1.10 (29.3 times usual volume) with stock at $63.20
A trader bought 11,000 EXC Dec 28 Puts for $0.75 (3.4 times usual volume) with stock at $27.88
A trader sold 2,600 MHFI Dec 70 Puts for $0.45 (3.3 times usual volume) with stock at $73.12
A trader bought 1,632 HZNP Feb 6 Calls for $0.95 (9.2 times usual volume) with stock at $5.87
A trader bought 4,700 FAST Feb 50 Calls for $1.20 (3.4 times usual volume) with stock at $46.91