A quick look at options actions for week ended 22 Jul 2011
1. Stockland SGP.ASX (Last $3.14)
One that is not often featured in high volumes, but higher than usual options volume had been going through Stockland in the last 2 weeks. Two weeks ago dominance was on the put side, with about 20% more puts than calls traded. Last week Tuesday (19 Jul), as SGP touched an all time low of $3.08, there was a switch. Last Friday, we can see more confidence on the long side in the share. There was a large trade with 5000 contracts of buying of calls, the series attracted the buying was the
Aug $3.10 call. On the puts, though with smaller quantities, selling of the
Aug $3.00 putwas seen. These strategies seem to be trying to go long on the stock which has returned to a 2 year low. It was last at this level in Aug 2009.
My preferred strategy for SGP though would be the selling of the
Nov11 $3.10 putfor about 11.5c (theoretical). If sellers are “put” stock in November, sellers of put would buy up SGP below $3.00 and get entitled to estimated dividend of 11.8c per share (4%) before Christmas (with pay day in February 2012). No need to buy the stock outright just yet.
2. Fortescue Metals Group FMG.ASX (last $6.64)
FMG had a good week outperforming the broader market and its peers BHP and RIO. Is it likely to experience a continued strong trend?
|
Performance from |
|
xjo |
bhp |
rio |
fmg |
|
18 Jul to 22 Jul 2011 |
|
2.93% |
1.35% |
1.10% |
3.75% |
We had active trading on both the calls and puts on FMG last week with steady volume, matching that of the week before. As FMG rose 3.75% last week, some protective strategies have set in. On Friday, there were large volume in selling of
Aug $6.75 callswith the largest open interest for calls positioned at the
$7.00 calllevel with some buying of
Jul $6.50 put as well.
As FMG ascended last few weeks, in an orderly and slow manner, without an increase in volatility, it does not look like it will breach above $7.00 strongly nor fall much off the $6.50 level as we move towards expiry this Thursday.
3. Bluescope Steel BSL.ASX (last $1.29)
Since 4 weeks ago (27 Jun) when BSL was sold to a low of $1.115, except for just 1 out of the 20 days, calls had been more active than puts. Last Friday, calls were again more actively traded, there were about 43% more calls traded than puts and Friday’s calls made up 37% of the calls traded for the week.
An active series was the buying of
Aug $1.20 calls.
With the positive put/call ratio on the stock, there may be more bullish moves ahead.
