EFA, OII Options – Unusual Trading Activity – February 19, 2014
This week we’re taking a look at unusual options trading activity in iShares MSCI EAFE Index (EFA) and Oceaneering International (OII).
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:
iShares MSCI EAFE Index (EFA)
A strategist is set to make big bucks if international stocks crash by the end of June.
EFA, the popular foreign, developed stocks ETF, is currently trading for $67.15. The share price is 22% above the 52-week low of $54.85 and is just 0.3% below the 52-week high of $67.36.
This week, 10,000 EFA June 36 puts were bought for $0.04. Previous open interest was zero, so this is definitely a new trade. The index would have to drop significantly for the value of these options to start increasing.
In this case, I don’t believe this is a speculative bet on a crash in international stocks. More likely, this is a hedge against an extreme drop. Typically, buying super cheap, far- out-of-the-money options like this is a hedging strategy rather than a speculative one.
Oceaneering International (OII)
At least one trader is betting that OII is going to continue higher after reporting impressive earnings this week.
OII, a large oil and gas equipment company, is trading at $72.90. The shares are 26% above the 52-week low of $57.75 and are 17% below the 52-week high of $57.64.
An unusually large amount of calls traded in OII recently. In fact, over 3,700 February 75 calls were purchased between $0.65 and $0.95. Typical daily volume in OII is 472 contracts, so these calls are trading quite a bit more than normal.
With February expiration at the end of this week, OII will have to climb to almost $76 in a hurry for the calls to be winners. The stock did reach $76 today before pulling back, so it’s possible the trade has been closed already for a quick profit.
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
Category: Unusual Options Trading Activity
