OIH, GLD Options – Unusual Trading Activity – May 5, 2014
This week we’re taking a look at unusual options trading activity in Market Vectors Oil Services ETF (OIH) and SPDR Gold Shares (GLD).
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:
Market Vectors Oil Services ETF (OIH)
A strategist believes oil services companies could be due for a pullback.
OIH, the leading oil services ETF, is currently trading for $52.26. The price is 28% above the 52-week low of $40.72 and is just 1% below the 52-week high of $52.76.
The trader bought 3,125 July 49 puts for $0.75 per contact. Then, he or she bought the same number of puts for $0.80 for a total of 6,250 contracts. The trade makes money if OIH closes below roughly $48.20 by July expiration.
At first glance, this appears to be a straight-up bearish play on OIH. There’s also the possibility the strategist is using the puts as a hedge against a long position.
SPDR Gold Shares (GLD)
A trader is taking a big, bullish stance on gold for this summer.
GLD, the most popular gold ETF, is trading for $126.12. The ETF is 12% below the 52-week high of $142.81 and 10% above the 52-week low of $114.46.
A recent trade in GLD has a block of over 9,000 July 129 calls changing hands. The calls were purchased for $2.10, meaning the trade cost the buyer about $2 million in premium.
With gold, it’s hard to say if a trade like this is a pure bullish bet on the precious metal or a hedge against inflation or overall market risk. Either way, it’s a sizeable position in the widely traded, gold-tracking vehicle.
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
