Today’s tickers: XRT, EXPD, RIMM, EWJ, GM, STP, MU, WFC, XLF, JPM & ASH
XRT Retail ETF SPDR – Shares of the retail ETF were on the rise today, gaining more than 3.5% to arrive at $23.58. Some traders established bearish bets using options, while one bullish trade stood out like a sore thumb in the June contract. At the June 22 strike price one investor purchased 17,200 in-the-money calls for a sizeable premium of 3.12 apiece. The rest of the notable trades were decidedly looking for downside movement in shares. At the near-term April contract a credit spread was initiated by purchasing 3,000 calls at the 24 strike price for 85 cents and selling 3,000 calls at the 22 strike for 2.00 apiece. The net credit enjoyed on the trade amounts to 1.15 and will be retained in full if shares fall below $22.00 by expiration. Another pessimistic investor crafted a put spread in the June contract by purchasing 5,000 puts at the 24 strike price for 2.40 each and selling 5,000 puts at the 20 strike for 90 cents. The net cost of the trade amounts to 1.50 and yields a maximum potential profit of 2.50 if shares can fall to $20.00 by expiration. Profits will begin to amass on the downside if shares fall below the breakeven on the trade at $22.50. Finally, some 5,000 puts were traded at the May 22 strike where there had previously been no open interest. The bulk of the smoke-signals from traders today suggest that the rally XRT experienced today will be short-lived.
EXPD Expeditors International of Washington, Inc. – The global logistics services company has experienced a share price rally of 6% to $29.64. EXPD appeared on our ‘high option volume put/call ratio’ market scanner with a put-to-call ratio of 190. One investor looks to be taking profit today from the short sale of 20,000 puts at the May 20 strike price, which may have originally been sold for a premium of between 0.88 cents and 1.18 per contract. The purchase of those 20,000 puts for 30 cents closes out the short position and leaves the investor with a profit of between 0.58 cents and 0.88 cents. Further along in the August contract it looks like this same investor is reestablishing a short put position. With no existing open interest at the May 22.5 strike price, 15,000 puts were likely sold short at…
