Paper bought 200,000 EEM Jul 40.5 Puts for $1.35 (2.5 times usual volume) with stock at $40.62
Paper bought 1,560 UNG Oct 17 Puts $0.38 (2.1 times usual volume) with stock at $20.96
Paper bought 1,618 WM Jun 41 Puts for $0.98 (2.6 times usual volume) with stock at $40.47
Paper bought 4,834 VWO Jul 40 Puts for $0.90 (45.5 times usual volume) with stock at $40.90
Paper bought 1,235 KND Jun 12.5 Puts for $0.15 (7.6 times usual volume) with stock at $13.65

Paper bought 200,000 EEM Jul 40.5 Puts for $1.35 (2.5 times usual volume) with stock at $40.62
Paper bought 1,560 UNG Oct 17 Puts $0.38 (2.1 times usual volume) with stock at $20.96
Paper bought 4,834 VWO Jul 40 Puts for $0.90 (45.5 times usual volume) with stock at $40.90
Paper sold 26,950 EWW Jun 73 Puts for $7.70 (3.8 times usual volume) with stock at $65.33
Paper bought 1,618 WM Jun 41 Puts for $0.98 (2.6 times usual volume) with stock at $40.47

When tracking quarterly 13F from hundreds of hedge funds, along with other notable investors, such as Julian Robertson, it is noticed that the information collected can be used to develop great investing strategies. This is especially notable when using ones from the top manager’s pool of favorite stocks as a great initial investment idea. One to check out is billionaire Julian Robertson, who just recently made a position of 850,000 shares in H&R Block (HRB). Recently H&R Block has picked up attention because of the hedge funds during the quarter. While the tax preparation company is also on the bullish side for selling, they are aiming for $1.89 earnings per share, implying a P/E multiple of 15.

BIG Institutional Trade:

On 6.4.2013 a trader bought 6340 HRB July 32 Calls for $.475
Risk: $47.50 per 1 lot
Reward: Unlimited
Breakeven: $32.475

My Trade: Buying the HRB July 31 Calls for $.70
Risk: $70 per 1 lot
Reward: Unlimited
Breakeven: $31.70

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.

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

Paper bought 100 CAH Jan 55 Calls for $0.40 (2.9 times usual volume) with stock at $46.00
Paper bought 5,000 XLY Jun 58 Calls for $0.09 (2 times usual volume) with stock at $55.63
Paper bought 700 MEOH Jan 50 Calls for $1.35 (10 times usual volume) with stock at $42.33
Paper bought 3,350 TWC Oct 115 Calls for $0.425 (5 times usual volume) with stock at $94.68
Paper bought BPL Jul 70 Calls for $0.35 (5.2 times usual volume) with stock at $64.50

Paper bought 20,297 Jun 36 Puts for $0.11 (5.6 times usual volume) with stock at $39.73
Paper bought 1,820 ARMH Jun 39 Puts for $0.60 (6.3 times usual volume) with stock at $41.30
Paper bought 1,000 KND Jun 12.5 Puts $0.10 (5.8 times usual volume) with stock at $13.88
Paper bought 3,000 LQD Sep 110 Puts for $0.45 (14.6 times usual volume) with stock at $116.86
Paper bought 10,000 ADS Dec 110 Puts for $0.70 (14.2 times usual volume) with stock at $173.88