Schaeffer's Investment Research analyst Andrea Kramer recaps put-option action ahead of October expiration
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- First up, HCBK was targeted by last-minute option bears. The stock saw almost 4,200 puts cross the tape - about eight times its average daily put volume. Nearly all of the action centered on the October 6 put, which saw more than 4,000 contracts change hands - mostly at the ask price, suggesting they were bought. Plus, put open interest at the strike skyrocketed overnight, pointing to eleventh-hour bearish bets. By purchasing the puts to open, the buyers are signaling they expect HCBK to retreat beneath the $6 level before the closing bell today, when October-dated puts expire.
- On the other hand, AMD put holders cashed in their chips ahead of expiration tonight. By the closing bell, the stock had seen roughly 14,000 puts change hands, more than twice its average daily put volume. However, put open interest at the October 8 strike depleted by more than 2,900 contracts overnight, while the deeper in-the-money October 9 strike saw open interest decrease by more than 500 contracts.
- Similarly, put holders also took profits on WYNN, which fell more than 5% yesterday on the heels of a poorly received earnings report. During the course of the session, the security saw around 25,000 puts traded, compared to its average daily volume of around 12,000 puts. Digging deeper, it appears speculators liquidated their winning positions at the October 125 and October 130 puts, which saw open interest backpedal by around 930 contracts and 660 contracts, respectively. In early trading, though, WYNN has pared some of yesterday's deficit, thanks to an upgrade to "outperform" from "market perform" at BMO.
- Finally, it seems a handful of speculators are betting on short-term support for NVDA. Specifically, the stock's at-the-money October 14 put saw nearly 3,900 contracts cross the tape yesterday - 72% of which traded at the bid price, suggesting they were sold. Plus, put open interest at the soon-to-expire strike jumped by 1,350 contracts overnight, confirming the initiation of fresh last-minute positions. By writing the puts to open, the sellers are expecting NVDA to end today's session north of the $14 level.
Andrea Kramer / Schaeffer's Investment Research holds no positions in any securities mentioned in this post.
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