The St. Joe Company (JOE) is a real estate developer in Florida. The company’s stock is currently trading around $19.55 in a 52 week range of $16.82-$23.28. The stock has been relatively sideways this year with shares falling by only 0.26% year to date. Options traders are expecting the stock to move higher as orders hitting the tape today are decidedly bullish.  Early in this morning’s session a trader bought 1,500 JOE May 20 calls for $0.325. This is a very bullish trade that will create the largest line of open interest at any strike in JOE. This block also represents the largest order to hit the tape in JOE on a day where options volume is 18 times the average daily volume. With shares of JOE breaking the Ichimoku Cloud to the upside it seems likely this trader is speculating on further upside rather than hedge against a short stock position.

Block Trade: A Trader bought 1,500 JOE May 20 Calls for $0.325
Risk: $32.50 per 1 lot
Reward: Unlimited
Breakeven: $20.325

Phillips 66 (PSX) operates as an energy manufacturing and logistics company. PSX is currently trading around $84.49 in a 52 week range of $54.80-$84.85. The company’s stock has been over performing the market this year with shares rallying year to date. Options traders seem to think that this trend will continue as order flow in PSX has been decidedly bearish during today’s trading session. Earlier today a trader bought 10,350 PSX Aug 90 Calls for $1.70 debit. This is an extremely bullish order and involves this trader laying out close to $1.7 Million in total premium. The chart looks great on the Ichimoku Cloud, so I think this is a great risk vs. reward set-up and I am LONG these Calls in PSX.

My Trade: I bought the PSX August 90 Calls for $1.75 debit
Risk: $175 per 1 lot
Reward: Unlimited
Targets: $1.95, $2.15, $2.35, $2.60 and $2.90

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

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.

Merrimack Pharmaceuticals, Inc. (MACK) a biopharmaceutical company is engaged in discovering, developing, and preparing to commercialize medicines paired with companion diagnostics for the treatment of cancer primarily in the United States. MACK is currently trading around $7.12 in a 52 week range of $2.05-$7.65. The company’s stock has been underperforming the market this year with shares falling year to date. Options traders seem to think that this trend will reverse as order flow in XYZ has been decidedly bullish activity yesterday as a trader bought 1700 MACK May 5 Calls for $.40 debit. Let’s breakdown their risk and how they profited $306,000 or 450% Returns overnight.
Yesterday a trader bought 1730 MACK May 5 Calls for $.40 debit.
Cash Outlay: $69,600

Greeks of this Trade:
Delta: Long
Gamma: Long
Theta: Short
Vega: Long
Today these Calls are trading $2.20, so let’s look at their profit:
$2.20- $.40 * 100 * 1700= $306,000

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.

LyondellBasell Industries N.V. (LYB) is a commodity chemical company that processes plastic resins and other chemicals into a range of fuels and other products. The company’s stock is currently trading around $90.40 in a 52 week range of $57.33-$93.99. The stock has been doing very well this year with shares of LYB rallying more than 12.4% year to date. Options traders are looking for more upside in LYB as action during today’s session is decidedly bullish. Earlier today a trader bought 3,061 LYB May 92.5 calls for $0.80. The stock is trading above the Ichimoku Cloud and has a relatively bullish chart set up indicating this trade was likely a speculative long rather than a hedge against an existing stock position. With this bullish order flow and chart set up I believe these calls are setting up well on a risk vs. reward set up.

Trade: I bought 100 LYB May 92.5 Calls for $0.80
Risk: $80 per 1 lot
Reward: Unlimited
Breakeven: $93.30

Exxon Mobil Corporation (XOM) is a refiner and marketer of oil and gas in countries around the world. The company’s stock is currently trading around $102.19 in a 52 week range of $84.79-$102.19. The stock has been doing very well this year with shares touching new 52 week highs today and stock higher by nearly 1% year to date. Options traders seem to think the stock will continue higher as we have seen some very bullish unusual options activity during today’s trading session. Earlier this morning a trader bought 8,583 XOM Oct 110 calls for $0.80. This is a very bullish trade that involves this trade investing more than $680,000 in capital. With stock trading well above the Ichimoku Cloud and on new 52 week highs I decided to get long XOM with paper and buy these calls for $0.80.

My Trade: I bought 200 XOM Oct 110 Calls for $0.80
Risk: $80 per 1 lot
Reward: Unlimited
Breakeven: $110.80

American Realty Capital Properties, Inc. owns and acquires single tenant, freestanding commercial real estate that is net leased on a medium-term basis, primarily to investment grade credit rated and other creditworthy tenants. ARCP is currently trading around $13.10 in a 52 week range of $12.13-$18.05. The company’s stock has been underperforming the market this year with shares falling 1.45% year to date. Options traders seem to think that this trend will reverse as order flow in ARCP has been decidedly bullish during today’s trading session. Earlier today a trader bought 1554 ARCP May 12.5 Calls for $.55. This is an extremely bullish order and involves this trader laying out $85,000 in total premium. With this order flow and this chart set up I believe ARCP is setting up well for a long.

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.

My Trade: I bought the ARCP May 12.5 Calls for $.55
Risk: $55 per 1 lot
Reward: Unlimited
Targets: $.65, $.80 and $1.00

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

Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo worldwide. Today a trader bought over 2,000 5.9.2014 37 Calls for $.74. This gives the buyer of the calls, the right but not obligation to buy 200,000 shares of stock at $37 between now and next week and involves this trader laying out $150,000 in premium for this position. With recent sell-offs in UAL and AAL, I thought that this was a good risk vs reward trade, so I bought these calls as well. Lets breakdown my trade.

The Trade: I bought the DAL 5.9.2014 37 Calls for $.74 debit
Risk: $74 per 1 lot
Reward: Unlimited
Targets: $.85, $1.00, $1.20 and $1.40

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

Dollar General Corporation, a discount retailer, provides merchandise products in the United States. Today we saw a trader buy over 7,000 DG 5.6.2014 55.5 Calls for $2.10. This is one of the biggest orders that I have ever seen in DG, so I knew the stock was going to rip to the upside. So, I decided to jump on board and buy these Calls as well. So, lets breakdown the trade in details.

Institutional Order Flow:
Trader bought 7,000 DG 6.6.2014 55.5 Calls for $2.10
Cash Outlay: $1.42 Million Dollars

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

I am LONG these Calls