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Unusual Options Activity: Stutland

Brian Stutland|President, Stutland Equities and CNBC Contributor
Friday, 14 Sep 2012 | 11:14 AM ET

Note: This post was written by Brian Stutland, President of Stutland Equities and a contributor to CNBC's "Options Action."

Fed wakes up assets from the dead - Upside Calls being bought in names that lagged in 1st half .

Yesterday 20,039 iShares Emerging Markets ETF(EEM) September 41.5 calls were bought at the ask for $0.37 and 51,558 EEM Nov. 36 puts were bought at the ask for $0.35. VXEEM , the CBOE Emerging Markets ETF Volatility Index traded down near its 52-week low, meaning the cost to buy an EEM option is cheap. EEM closed yesterday at 41.68, so the call strike is much closer to the money than the puts. This suggests the trader is also bullish on emerging markets but is protecting himself should there be a strong reversal and a break of support in the 37 area. (Read More: Why Visa Could Be A Priceless Trade: Scott Nations - )

Yesterday we also saw a lot of call buying in the financial sector as traders made bets banks would rally into November expiration due to Fed easing. One trader bought 38,671 Bank of America November 10 calls for $0.26. The upside call in BAC continue to be very active and these option buyers have made a killing doing it. Bank of America's 52-week high is 10.10, and this trade is a bet that the bank trades higher than that in the coming months. We also saw a trader sell 44,211 Financial SPDR(XLF) Oct. 17 calls and buy 40,000 XLF Nov. 17 calls for a net debit of $0.09. This appears to be a trader rolling his long call position forward to profit from a rally into November. The trader does not want to miss the party if XLF ends on the highs as 2012 comes to a close. Yesterday XLF broke out to a new 52-week high, and this is a bet it goes at least as high as 17.09 by November.

More Financials in The News:

  • Goldman Sachs Ends Two-Year Program for New Hires at Entry Level-
  • Morgan Stanley Fund in Talks to Buy Moscow Mall: Sources -

Brian Stutland is the President of Stutland Equities and a contributor to CNBC's "Options Action."

Watch Options Actionon CNBC Fridays 5:00pm ET, Saturdays at 6a ET and on Sundays at 6a ET

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