Synta Pharmaceuticals Corp (SNTA) is a bio-pharmaceutical company who is focused on developing drugs to serve patients with cancer. Currently the stock is trading around $5.10 in a 52 week range of $3.70-$11.88. Shares of SNTA have been massively under-performing the market this year having fallen over 43% year to date. Despite the weakness in the stock we have seen some very bullish options activity in SNTA during today’s trading session. Earlier today a trader sold 3,000 SNTA Dec 4 puts for $0.15. This is a very bullish bet that involves this trader assuming over $850,000 in risk. The large amount of risk this trader is taking on indicates their high level of conviction that SNTA will close above $4.00 on December expiration. Although SNTA is looking weak on a chart the stock has put together a few good days having rallied over 37% off of its lows made on Wednesday of last week. We believe that recent price action and this large block trade signal as an opportunity for a covered call in SNTA. (more…)

A trader sold 4,000 PKT Dec 15 Calls for $0.50 (8.2 times usual volume) with stock at $14.96
A trader bought 6,040 AMLP Jan 17 Puts for $0.25 (4.3 times usual volume) with stock at $17.62
A trader bought 2,000 OREX Dec 4 Puts for $0.32 (3.4 times usual volume) with stock at $5.68
A trader bought 5,000 IBKR Dec 22 Puts for $0.30 (5.5 times usual volume) with stock at $22.84
A trader bought 1,600 CPB Dec 41 Puts for $0.50 (3.7 times usual volume) with stock at $42.00

A trader bought 3,400 CCJ Dec 20 Calls for $0.40 (2.8 times usual volume) with stock at $19.37
A trader bought 977 KND Feb 15 Calls for $1.00 (3.3 times usual volume) with stock at $15.19
A trader bought 2,000 FNF Jan 2015 30 Calls for $1.90 (2.7 times usual volume) with stock at $27.99
A trader sold 1,000 CG Jun 30 Puts for $2.40 (4.1 times usual volume) with stock at $33.22

A trader sold 4,000 PKT Dec 15 Calls for $0.50 (8.2 times usual volume) with stock at $14.96
A trader bought 3,400 CCJ Dec 20 Calls for $0.40 (2.8 times usual volume) with stock at $19.37
A trader bought 977 KND Feb 15 Calls for $1.00 (3.3 times usual volume) with stock at $15.19
A trader bought 6,040 AMLP Jan 17 Puts for $0.25 (4.3 times usual volume) with stock at $17.62
A trader bought 5,000 IBKR Dec 22 Puts for $0.30 (5.5 times usual volume) with stock at $22.84

The Manitowoc Company, Inc (MTW) is a capital goods manufacturer operating in cranes and food-service equipment. The company’s stock is currently trading around $19.70 in a 52 week range of $12.82-$21.87. The stock has been outperforming the market adding more than 25% to share prices year to date. Recent activity in the options market indicates that traders believe this trend will continue through next year as traders are placing very large bets on MTW. On November 13^th a trader bought 15,400 MTW Jan 2015 30 Calls for $0.90. This is a nearly $1.9 million bet on further upside in MTW. The MTW chart is relatively neutral with stock trading inside the Ichimoku Cloud, indicating the stock is not trending. Despite the lackluster technical in MTW we believe the activity in MTW is strong enough to justify a long term set up. We will look to get long MTW with a longer time frame. (more…)

The Home Depot, Inc (HD) is a home improvement retailer operating warehouse style stores selling assortments of building materials and home improvement goods. The company’s stock is currently trading around $79.90 in a 52 week range of $60.21-$81.56. The stock has been outperforming the market this year rallying over 29% year to date. The company is set to release its most recent quarterly earnings report tomorrow before the market open. Analysts are expecting HD to report earnings of $0.90 per share on revenues of $19.1 billion. Historically, HD is a strong performer on earnings day having rallied 5 of the past 8 quarters with an average moved of 2.5%. HD is trading relatively well on a chart as well with shares trading just off of their 53 week highs and well above the Ichimoku Cloud. We believe that both the historical performance in HD and the strong technical present a great opportunity to get long HD ahead of earnings. With the options market currently implying a move of around $2.75 by this Friday’s expiration we will look to set up a trade with a target around $82.75. (more…)

Twitter, Inc. (TWTR) options listed for the first time today and opened for trading with this morning’s opening bell. TWTR stock is trading around $0.80 lower on the day at $43.90. The stock has been trading in a range of $39.40-$50.09 since its IPO. It appears that TWTR implied volatility is trading at a premium to other names in the space like FB and LNKD. This could provide us with an opportunity to sell what look like relatively expensive options in TWTR. Picking strikes to sell and which strategy to use can be tricky as there is only 7 trading days’ worth of price action and data. This means that technical indicators are not going to be much use to us. Looking at TWTR options for next week’s expiration we can see that the at the money straddle is trading around $2.90. Using this straddle price we can calculate implied closes for TWTR and use them to set up a trade. This method works best here because of the lack of technical data.  With the options market implying TWTR stock to close at either $46.90 or $41.10 on next Friday’s expiration we will now set up a trade based on those targets.  (more…)

A trader bought 3,000 EPD Dec 65 Calls for $0.15 (2.5 times usual volume) with stock at $61.50
A trader bought 2,100 SWIR Dec 20 Calls for $0.70 (2.5 times usual volume) with stock at $18.67
A trader bought 2,500 ENOC Dec 20 Calls for $0.30 (12.2 times usual volume) with stock at $18.17
A trader bought 6,000 JIVE Dec 12.5 Calls for $0.30 (2.8 times usual volume) with stock at $11.21
A trader sold 20,000 CDNS Feb 12 Puts for $0.35 (15.5 times usual volume) with stock at $12.70

A trader bought 5,500 NIHD Jan 2015 3 Puts for $1.20 (3.4 times usual volume) with stock at $2.92
A trader bought 2,300 WU Jan 60 Puts for $0.50 (2.4 times usual volume) with stock at $16.48
A trader bought 950 MAR Jan 47-43 Call Spreads for $1.20 (2.4 times usual volume) with stock at $47.23
A trader bought 1,800 CALL Jan 2015 10 Puts for $2.05 (3.7 times usual volume) with stock at $12.57

A trader bought 3,000 EPD Dec 65 Calls for $0.15 (2.5 times usual volume) with stock at $61.50
A trader bought 2,100 SWIR Dec 20 Calls for $0.70 (2.5 times usual volume) with stock at $18.67
A trader bought 6,000 JIVE Dec 12.5 Calls for $0.30 (2.8 times usual volume) with stock at $11.21
A trader sold 20,000 CDNS Feb 12 Puts for $0.35 (15.5 times usual volume) with stock at $12.70
A trader bought 5,500 NIHD Jan 2015 3 Puts for $1.20 (3.4 times usual volume) with stock at $2.92