CCL, WDAY Options – Unusual Trading Activity – April 14, 2014

| April 14, 2014 | 0 Comments

Unusual Trading VolumeThis week we’re taking a look at unusual options trading activity in Carnival (CCL) and Workday (WDAY).

As many of you know, unusual options volume can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term.

This is something professional options traders pay a lot of attention to, and for good reason…  Unusual options activity can “tip off” big moves in a stock, either up or down.

So let’s take a look at some ‘interesting’ activity that caught our eye this week:

Carnival (CCL)

A big time bullish trade hit the tape in Carnival options.

CCL, the popular cruise-line, is currently trading for $36.58.  The price is 18% above the 52-week low of $31.02 and is just 12% below the 52-week high of $41.63.

A trader sold more than 17,000 January $36.50 calls for $3.  At the same time, over 34,000 January $41.50 were purchased for $1.35.  The open interest on the $41.50 strike was just under 1,000, so that leg of the spread was definitely opening.

Based on the open interest, this is most likely a long-call roll trade.  The trader is closing his or her position at $36.50 and moving it higher, while doubling the position size.  Basically, it’s a pure bullish strategy on CCL.

Workday (WDAY)

At least one trader believes Workday, a human resource software company, will halt its steep decline in the next month or so.

WDAY is trading for $74.76 and is down nearly 30% over the last month.  The shares are up 32% from the 52-week low of $56.62 and are 36% below the 52-week high of $116.47.

The trader sold 3,500 May 65 puts for $1.60.  The strategy is maximized if the shares remain above $65 by May expiration in about a month.  The total premium collected amounts to $560,000.

After WDAY’s plunge off a cliff, the trader clearly believes the stock doesn’t have much farther to fall, at least in the next month.  He or she may also be using the put sale as a method to get long the shares at a price below $65, should the shares continue to decline.

More Options Ideas…

That wraps up this week’s unusual options trading and volume…

Keep in mind, there’s a lot more unusual options activity going on than what we discuss here.

We just try to bring you what we feel are the most significant ones– and the ones you might actually be able to make some money on!

So keep an eye on your email inbox… we have a lot more options trading ideas coming your way!

Yours in Profit,

Gordon Lewis

Tags: ,

Category: Unusual Options Trading Activity

About the Author ()

Gordon Lewis is the Chief Investment Strategist and editor for the popular daily newsletter – Options Trading Research. He’s also editor of our dynamic theme-based options trading service, Advanced Options Adviser, and one of the key analysts behind the highly successful Options Trading Wire.