Hewlett-Packard Company (HPQ) provides products and technology to individual customers, small and large businesses and other large enterprises.  The company’s stock is currently trading around $25.30 in a 52 week range of $12.22-$27.78. HPQ has had a very strong year adding over 77% to share prices year to date.  HPQ is set to announce their most recent quarterly earnings today after the market close.  Historically, HPQ has been weak on earnings day over the past 8 quarters. The stock has sold off on earnings day 5 times in the past 8 quarters with an average move of 9.1%. On a chart shares of HPQ are trading in bullish territory according to the Ichimoku Cloud. The future cloud however, is indicating a very neutral future for HPQ. We believe that despite the weakness in historical performance and the relatively neutral chart that HPQ sets up well for a long into earnings. Tech companies have been doing well this cycle and we believe this should be the same for HPQ.  Currently the options market is implying a move of $1.80 up or down by this Friday’s expiration.  We can use this implied move to calculate an upside target around $27.00. Using this level we can now set up a trade. (more…)

A trader bought 1,000 NUVA Jan 35 Calls for $0.95 (5.9 times usual volume) with stock at $33.09
A trader bought 16,600 CNP Feb 25 Calls for $0.55 (7.4 times usual volume) with stock at $23.11
A trader bought 161,500 XLF Dec 22 Calls for $0.13 (4.5 times usual volume) with stock at $21.57
A trader bought 3,224 SYY Dec 34 Calls for $0.25 (6.5 times usual volume) with stock at $33.91
A trader bought 2,516 VNET Mar 20 Calls for $0.90 (12.3 times usual volume) with stock at $16.96

A trader bought 11,500 NIHD Jan 2016 2 Puts for $1.00 (4.4 times usual volume) with stock at $2.43
A trader bought 1,200 MILL May 5 Puts for $0.45 (6.9 times usual volume) with stock at $7.59
A trader bought 5,534 ORCL Nov 29^th 35 Puts for $0.15 (3 times usual volume) with stock $35.06
A trader bought 14,000 RTN Jan 87.5 Puts for $2.46 (8.8 times usual volume) with stock at $87.59

A trader bought 3,224 SYY Dec 34 Calls for $0.25 (6.5 times usual volume) with stock at $33.91
A trader bought 2,516 VNET Mar 20 Calls for $0.90 (12.3 times usual volume) with stock at $16.96
A trader bought 5,534 ORCL Nov 29^th 35 Puts for $0.15 (3 times usual volume) with stock $35.06
A trader bought 14,000 RTN Jan 87.5 Puts for $2.46 (8.8 times usual volume) with stock at $87.59
A trader bought 161,500 XLF Dec 22 Calls for $0.13 (4.5 times usual volume) with stock at $21.57

American International Group, Inc (AIG) is an insurance company providing a range of financial services to customers around the world. The stock is currently trading around $50.00 in a 52 week range of $32.10-$53.33. The stock has been outperforming the market this year adding nearly 42% to share prices year to date. Activity in AIG options today however suggests the run in AIG may be coming to a close. Earlier in today’s trading session we saw a trader sell 9,000 AIG Dec 50 straddles for $1.97. This trader is collecting nearly $1.8 million worth of premium in this trade and is exposing himself to unlimited risk. The size and risk level of trade suggest a relatively high level of conviction. While we believe this order is worth taking note of we would not want to be selling straddles along with the block trader. Instead we will look at a strategy known as an Iron butterfly. This allows is to take the same view as the block trader but without the risk of blowout. (more…)

A trader bought 1,434 EXEL Jan 7 Calls for $0.15 (2.2 times usual volume) with stock at $5.73
A trader bought 1,500 ILMN Jan 90 Calls for $11.50 (2 times usual volume) with stock at $99.18
A trader bought 15,000 CNP Dec 25 Calls for $0.575 (6.1 times usual volume) with stock at $24.93
A trader bought 7,000 GNK Jan 2 Calls for $0.45 (3 times usual volume) with stock at $2.23
A trader sold 4,732 BZH Dec 18 Puts for $0.20 (2.5 times usual volume) with stock at $19.57

A trader bought 750 OSUR Dec 7.5 Puts for $1.10 (13.6 times usual volume) with stock at $6.62
A trader bought 1,000 ABMD Jan 25 Puts for $0.57 (7.4 times usual volume) with stock at $28.62
A trader bought 11,000 CBST Jan 65 Puts for $2.60 (14.9 times usual volume) with stock at $71.20
A trader sold 3,750 BKS Dec 17 Calls to buy the 16-14 Put Spread for $0.46 (10 times usual volume) with stock at $15.70

A trader bought 1,434 EXEL Jan 7 Calls for $0.15 (2.2 times usual volume) with stock at $5.73
A trader bought 1,500 ILMN Jan 90 Calls for $11.50 (2 times usual volume) with stock at $99.18
A trader bought 15,000 CNP Dec 25 Calls for $0.575 (6.1 times usual volume) with stock at $24.93
A trader sold 3,750 BKS Dec 17 Calls to buy the 16-14 Put Spread for $0.46 (10 times usual volume) with stock at $15.70
A trader bought 11,000 CBST Jan 65 Puts for $2.60 (14.9 times usual volume) with stock at $71.20

Beazer Homes USA, Inc (BZH) is a home builder in 16 states in the U.S. The company designs sells and builds single and multi-family homes. Shares of the company’s stock are currently trading around $19.60 in a 52 week range of $13.91-$23.29. The stock has been performing well this year having added over 15% to share prices year to date. Unusual option activity yin BZH today would suggest that traders believe this uptrend is going to continue through the end of the year. Early in today’s session a trader sold 4,732 BZH Dec 18 puts for $0.20. This is an extremely bullish trade that also represents volume in BZH 2.1 times the average daily option volume in the name. This trade also carries a relatively high level of risk meaning this trader has a high level of conviction. Although this is a bullish trade this trader isn’t necessarily betting on the stock rallying. This trader is expressing a strong view that the stock will close above $18.00 on December expiration.  With the stock trading in bullish territory according to the Ichimoku Cloud we believe that this order provides a great signal for a covered call in BZH. (more…)

Tiffany & Co (TIF) is a company operating specialty retailers offering mainly jewelry.  The stock is currently trading around $81.05 in a 52 week range of $55.83-$83.48. The stock has had a great year having added nearly 42% to share prices this year. TIF is set to report their most recent quarterly earnings before the market open tomorrow. The stock has mixed historical performance on earnings day. Over the past 8 quarters the stock has rallied 4 times and sold off 4 times with an average move of 5.3%. However, the stock has rallied 3 times over the past 4 quarters. Technically speaking, the stock is trading in bullish territory according to the Ichimoku Cloud.  The future cloud is also upward sloping indicating a potential for more upside in TIF.  We believe the technical and historical data lines up well for a long in TIF ahead of earnings. To set up a trade we must first develop an upside target. The options market is currently implying a move of $4.60 by Friday’s expiration. We will use this implied move to calculate an upside target of $85.65 and set up a trade. (more…)