Welcome to another daily Unusual Options Activity post. Why do DD when you can see what other people are heavily investing in? A list of previous plays as well as resources are available at https://www.noeticoptions.com/.
Recap – Congrats to everyone following the plays, you should have made out quite well today. The SPY ended up 2.4% but the previous plays on average well out-performed the increase on the SPY. ON and WY both had stellar days ending at 20.16, +6.22% and 23.42, +5% respectively. SU from yesterday also had a 10% increase. ZUO was the only one that did not participate in the rally, but still ended up green (mildly) at +.79%. If you played TECK, FLEX, or continued to hold NCR from earlier in the week – you also made out. Nice.
Due to the demand for more classical unusual option plays these posts will now be divided into Unusual Momentum Option Activity and Classic Unusual Options Activity.
Unusual Momentum Option Activity –
June 5th, 2020 Option Activity Fast Facts –
Highest Multiple over Daily Avg (with ADV >5k) – DD with 8x its ADV of 8,327 and 10k calls traded and 59k puts.
Ticker with most contracts Traded – AAL 1.1 Million and 4x it’s ADV. 571k calls traded and 536k puts
Largest Put to Call Ratio (w/ Option volume over 10k) – BKLN with 135.4 P/C Ratio and 40,746 puts and 301 calls.
Largest Call to Put Ratio (w/ Option volume over 10k) – CDEV with 150 C/P Ratio and 36,520 calls and 243 puts traded.
1. Ticker :BHC
Spot Price : $19.24
Company Summary : Bausch Health Companies Inc. develops, manufactures, and markets a range of pharmaceutical, medical device, and over-the-counter (OTC) products primarily in the therapeutic areas of eye health, gastroenterology, and dermatology. The company operates through four segments: Bausch + Lomb/International, Salix, Ortho Dermatologics, and Diversified Products. The Bausch + Lomb/International segment offers products with a focus on the vision care, surgical, and consumer and ophthalmology Rx products in the United States; and Solta products, branded and generic pharmaceutical products, OTC products, and medical device products, and Bausch + Lomb products in Canada, Europe, Asia, Australia, Latin America, Africa, and the Middle East. The Salix segment provides gastroenterology products in the United States. The Ortho Dermatologics segment offers dermatological products in the United States; and Solta medical aesthetic devices internationally. The Diversified Products segment provides pharmaceutical products in the areas of neurology and other therapeutic classes, as well as generic and dentistry products in the United States. The company was formerly known as Valeant Pharmaceuticals International, Inc. and changed its name to Bausch Health Companies Inc. in July 2018. Bausch Health Companies Inc. is headquartered in Laval, Canada.
Special Considerations : None
Next Earnings Date: 08/04/20
Option Information :
Today’s Option Volume : 41,570 Average Daily Volume : 19,729 Multiple over ADV : 4
Total Calls : 41,570 Total Puts : 1,957 C/P Ratio : 20.24
Calls at ask % : 49% Calls at bid % : 18%
Puts at ask % : 21% Puts at bid % : 8%
Notable strikes : JUN 12 ’20 20C – with 9.83k volume today. Jun 19 ’20 20C also had 2k.
My Impression : June 10th of next week is the Goldman Sachs 41st Annual Virtual Global Healthcare Conference. Perhaps this is a play for some great news on the conference. Regardless, the momentum is very bullish and I don’t think this move is veiled by CoVID-19 euphoria. The call C/P Ratio and amount of calls at ask are quite bullish.
2. Ticker : HPE
Spot Price : 11.15, +.67 (+6.39%)
Company Summary (from Yahoo Finance): Hewlett Packard Enterprise Company provides solutions that allow customers to capture, analyze, and act upon data from edge to cloud. The company offers industry standard servers for multi-workload computing; mission-critical servers; storage solutions; and solutions for secondary workloads and traditional tape, storage networking, and disk products, such as HPE MSA and HPE XP. It also provides mobility and Internet of Things solutions under the Aruba brand, which include wired and wireless local area network products, such as Wi-Fi access points, switches, routers, and sensors; software products, such as cloud-based management, network management, network access control, analytics and assurance, and location services; and professional and support services, as well as as-a-service and consumption models for the intelligent edge portfolio of products. In addition, the company offers various flexible investment solutions, which comprise leasing, financing, IT consumption, and utility programs and asset management services for customers to facilitate unique technology deployment models and the acquisition of complete IT solutions, including hardware, software, and services from Hewlett Packard Enterprise and others. Further, it invests in communications and media solutions, Hewlett Packard labs, and various business incubation projects. The company serves commercial and large enterprise groups, including business and public sector enterprises; and through various partners comprising resellers, distribution partners, original equipment manufacturers, independent software vendors, systems integrators, and advisory firms. Hewlett Packard Enterprise Company was founded in 1939 and is headquartered in San Jose, California.
Special Considerations : None
Next Earnings date: 08/25/20
Option Information :
Today’s Option Volume : 25,896 Average Daily Volume : 8,542 Multiple over ADV : 3
Total Calls : 24,591 Total Puts : 1,305 C/P Ratio : 18.8
Calls at ask % : 31% Calls at bid % : 31%
Puts at ask % : 16% Puts at bid % : 20%
Notable strikes : Jun 19 ’20 11.5C with ~14k vlm and 142 OI.
My Impression : The ATMDigital 2020 Conference is June 9th. Perhaps some are expecting some news from HPE. A lot of the volume for the Jun 19 ’20 11.5C came in after 3 pm. The C/P ratio is pretty positive. Could be a good play to buy the rumor and sell the news.
CLASSIC UNUSUAL OPTIONS ACTIVITY –
These can be found on todays post at https://www.noeticoptions.com/.
Quick note about ON : This stock would have made the list today, but it was already included a few days ago. If you are still holding ON, I’d keep your position. C/P Ratio was 56.8% with 51% of calls bought at the ask. This hit my 5% TP this AM so I am out, but it still looks like a solid play. The JUN 19 ’20 21 strike had a lot of action today 11k contracts sold.
SABR would have also made momentum list but I decided to include in the Classic UOA section. In my opinion it fits both and looks like a good buy.
Both BHC and HPC are getting volume from conferences. This worked out reasonably well with FLEX earlier in the week. Buying the rumor and selling the news is always a good idea. If you are to enter any plays I would wait until after the open Monday because there is likely to be a decent pull back.
As always, please visit my website https://www.noeticoptions.com/ . In the future only half of the plays will be posted here. I also have an instagram : https://www.instagram.com/noeticoptions/ which I will post on when there is a new post.
Thanks for reading, enjoy the weekend!
DISCLAIMER – These are my observations that I have made at the end of each day and trades that I am considering placing or watching. I am not responsible for your financial losses if you follow any of these trades. As always, do your own due diligence.