Valeant Pharmaceuticals International, Inc. develops, manufactures, and markets pharmaceuticals, over-the-counter (OTC) products, and medical devices in the areas of eye health, dermatology, and neurology therapeutic classes worldwide. Every single day I watch Unusual Options Activity and talk to my subscribers about the trades at www.keeneonthemarket.com I watch over 1,500 trades daily and yesterday I saw a trade that was so unusual that I thought it was worth mentioning. A trader bought 2,000 FURX June 105 Calls for $3.90. Lets breakdown their trade:

Institutional Order: Trader bought 1,804 VRX June 135 Calls for $5.90
Cash Outlay: $1,064,360
Potential Profit: Unlimited

Overnight the Stock gapped higher and these Calls have moved in value from $5.90 to $7.90, so lets breakdown their profits:

1804 * 2.00 * 100= $360,000 Profits

Furiex Pharmaceuticals, Inc. operates as a drug development company that is involved in compound development and collaboration activities primarily in the United States. Every single day I watch Unusual Options Activity and talk to my subscribers about the trades at www.keeneonthemarket.com I watch over 1,500 trades daily and yesterday I saw a trade that was so unusual that I thought it was worth mentioning. A trader bought 2,000 FURX June 105 Calls for $3.90. Lets breakdown their trade:

Institutional Order: Trader bought 2,000 FURX June 105 Calls for $3.90
Cash Outlay: $780,000
Potential Profit: Unlimited

Overnight the Stock gapped higher and these Calls have moved in value from $3.90 to $5.30, so lets breakdown their profits:

2,000 * 1.4 * 100= $280,000 Profits

New Oriental Education & Technology Group Inc (EDU) is a private educational services company in China. The company’s stock is currently trading around $26.85 in a 52 week range of $17.46-$34.50. The stock has been underperforming the market this year with shares falling nearly 15% year to date. Despite the stocks relative underperformance options traders are taking a bullish stance on EDU in today’s trading session. Earlier today a trader bought 1,988 May 28 calls for between $1.10 and $1.15. This is the largest block of options to trade on a day when more than 6.8 times the average daily options volume has traded in EDU. Although the stock is trading below the Ichimoku Cloud order flow this strong could be signaling a short term bottom in EDU.

My Trade: Buying the EDU May 28 calls for $1.10
Risk: $110 per 1 lot
Reward: Unlimited
Breakeven: $29.10

Caesars Entertainment Corporation owns, operates, or manages casino entertainment facilities. Its casino entertainment facilities include land-based casinos, riverboat or dockside casinos, and managed casinos, as well as casinos combined with a thoroughbred racetrack and a harness racetrack. Today we saw a trader bought 1,403 CZR 5.2.2014 18 Calls for $1.05 debit per a lot. This is bullish trade where a trader thinks the stock can move higher and maybe it is due to the catalyst event next week. Lets breakdown the trade:

The Trade: Trader bought 1,403 CZR 5.3.2014 18 Calls for $1.05
Their Risk: $147,315 Cash Outlay
Their Reward: Unlimited
Their Breakeven: $19.05

I am long these Calls for $1.10

Calpine Corporation, a wholesale power generation company, owns and operates natural gas-fired and geothermal power plants in North America. Today a trader bought over 2,500 CPN May 22 Calls for $.60 debit. This trader has the right, but not obligation to buy 250,000 shares at $22 between now and expiration. I got into this trade a little too late, but I think CPN can move higher as the options activity that we saw was 30 times the usual volume it trades in a day. I think that CPN can trade north of $23, so I bought the CPN May 22 Calls for $.80 debit. Lets break down this trade.

The Trade: I bought the CPN May 22 Calls for $.80
Risk: $80 per 1 lot
Targets: $.95, $1.10, and $1.25

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

Meritage Homes Corporation (MTH) is a designer and builder of homes in the U.S. The company’s stock is currently trading around $42.50 in a 52 week range of $38.42-$52.95. The stock has been underperforming the market this year with shares falling nearly 11.6% year to date. In spite of the stocks weakness this year we are seeing traders stepping in to get long MTH before they report earning on Apr 23^rd. Earlier today a trader bought 2,000 MTH Sep 45 Calls for $2.90. This is the largest block to trade in MTH on a day when options volume in MTH is 8 times the average daily volume. Although the stock is weak on a chart this is a sizeable bet and could signal for a long opportunity in MTH.

Block Trade: A trader bought 2,000 MTH Sep 45 Calls for $2.90
Risk: $290 per 1 lot
Reward: Unlimited
Breakeven: $47.90

T-Mobile US, Inc (TMUS) is a provider of mobile communications services in the U.S., Puerto Rico, and the U.S. Virgin Islands. The company’s stock is currently trading around $30.85 in a 52 week range of $16.01-$34.10. The stock has been doing relatively poorly this year with shares falling 8.65% year to date. Despite the stock’s relative weakness this year options traders are betting on some short term upside in TMUS. Earlier in today’s trading session a trader bought 2,187 TMUS Apr 25^th weekly 31 calls for $0.55. This is a 1 week bet that the stock will trade above the breakeven of $31.55 on expiration.  While weekly calls can be risky on a risk vs. reward basis I like this trade setup.

My trade: Buying the TMUS Apr 25^th Weekly 31 Calls for $0.62
Risk: $62.00 per 1 lot
Reward: Unlimited
Breakeven: $31.62

The Gap, Inc. (GPS) operates as an apparel retail company worldwide. It provides apparel, accessories, and personal care products for men, women, and children under the Gap, Banana Republic, and Old Navy brands.  Yesterday we saw a HUGE bullish bet in GPS to the upside as a trader bought 4,000 GPS May 40 Calls for $.59 and I jumped in on these calls as the price was through the offer.  A trader thinks the stock can get back into the Ichimoku Cloud on the daily within the next month.  Let’s look at the trade I took:

The Trade: I bought the GPS May 40 Calls for $.60
Risk: $60 per 1 lot
Reward: Unlimited
Targets: $.75, $.90, $1.10 and $1.30

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