Unusual Options Activity In Agilent Technologies (A)

| January 5, 2015 | 0 Comments

Unusual Trading VolumeUnusual Options Activity in Agilent Technologies (A)

As many of you know, unusual options activity 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:

Agilent Technologies (A) is a bio-analytical solutions provider. The company makes everything from lab equipment to robotic systems. Check here for more info on the company.

Over the last year, Agilent Technologies stock has been mostly range-bound. The share price is $40.56, which is just 1.6% higher than a year ago. The stock is 7% from the 52-week high of $43.49 and 14% off the 52-week low of $35.63.

So what does unusual options activity in A tell us?

While Agilent Technologies shares haven’t done much lately, a big trade in A options could mean the stock is about to get going.

Here’s the deal…

A trader bought 2,500 May 42.50 calls while selling the May 50 calls the same number of times. The total cost of this portion of the trade, also known as a call debit spread, was $2.25 per spread.

However, the trader also sold 2,500 May 35 puts for $1.25. The put sale is another method to bring down the cost of the total spread. As such, the trader’s cash outflow was only $1.00 for total spread.

This call debit spread combined with selling the puts is a very bullish trade on Agilent Technologies. The trade is maximized if A close at $50 at expiration. However, the trader will make money as long as the stock is above $43.50.

With Agilent Technologies trading in a range for much of the last year, this could be a bet that the stock is finally going to break out. From a technical standpoint, the share price does look ready to move higher.

Here’s the chart of A:


More Options Trading Ideas…

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!

Yours in Profit,

Gordon Lewis
Options Trading Research

BIO: Gordon Lewis has been trading options for more than 15 years and he now writes and edits for Optionstradingresearch.com. You can sign up for the newsletter and get a free research report. We are your go-to source for top notch options trading research.


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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.