EFA, TIF Options – Unusual Trading Activity – October 20, 2014
This week we’re taking a look at unusual options trading activity in iShares MSCI EAFE (EFA) and Tiffany (TIF).
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 (EFA)
A massive bearish trade in EFA, the advanced countries ETF (minus US and Canada), suggests global stocks could have farther to fall.
EFA is currently trading for $60.78. The price is just 4% above the 52-week low of $58.61 and is 12% below the 52-week high of $69.29.
To kick off this week, a huge amount of put spreads traded in EFA. The December 52-57 put spread was purchased for a total of $0.53. That is, the 57 puts were bought and the 52 puts were sold to help reduce the cost of the spread. The spread traded a whopping 76,000 times.
Obviously, a huge spread like this is an institutional trade. However, it could be speculation or it could be a hedge against long international portfolio holdings. Regardless, it was an expensive trade, costing over $4 million to put on.
Tiffany (TIF)
Jewelry maker Tiffany could be in for a rebound, according to recent options action.
TIF is trading for $90.02. The shares are 14% below the 52-week high of $105.26 and 18% above the 52-week low of $76.49.
Today, over 3,000 November 85 puts were sold for roughly $1.25. Judging by open interest, these are opening trades.
The trade reaches max profit if TIF closes above $85 by November expiration. The share price looked like it might touch $85 briefly last week, but has rebounded sharply and is back above $90. At least one trader believes the $85 level will continue to hold for another month.
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
