EPI, WDC Options – Unusual Trading Activity – May 12, 2014
This week we’re taking a look at unusual options trading activity in Wisdom Tree India Earnings (EPI) and Western Digital (WDC).
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:
Wisdom Tree India Earnings (EPI)
Traders seem to believe India is due for a bull market.
EPI, a popular India stock-tracking ETF, is currently trading for $20.36. The price is 58% above the 52-week low of $12.86 and is now 2% above the previous 52-week high of $19.81.
Traders gobbled up calls in EPI in both May and June recently. The May 21 calls traded for $0.45 over 6,500 times. And, the June 20 calls traded up to $1.40 over 13,000 times.
These are straightforward, bullish plays on the Indian stock market. Basically, the new government there is expected to be pro-business, and could also push through needed reforms for the country.
Western Digital (WDC)
A strategist is making a large, bearish bet on data storage company Western Digital.
WDC is trading for $81.93. The shares are 14% below the 52-week high of $95.00 and 45% above the 52-week low of $56.59.
The trader purchased the June 75/June 80 put spread for $1.13. That is, he or she bought the June 80 puts and sold the June 75 puts. The spread traded 4,400 times, which is well above previous open interest.
The trade is maximized if WDC is below $75 at June expiration. The maximum gain is $3.87 per spread, while the max loss is just the premium paid, or $1.13 per spread.
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
