Credit: Shutterstock photoVolatility spiked last week, and now the sellers are coming out of the woodwork.
optionMONSTER's tracking systems detected heavy short activity in the puts of companies including Qualcomm, Hartford Financial, Pozen, and Time Warner Cable. The transactions came as the stocks found support or rebounded after last week's broad-market collapse.
Some 2.8 million puts were sold across the entire market yesterday, according to calculations by our monitoring programs, about 48 percent greater than average. Volatility levels soared as panic swept global markets amid worries that Greece could default on its sovereign debt, which could tear holes in bank balance sheets and force investors to liquidate other assets to cover losses.
The VIX, which measures the cost of insuring the S&P 500, surged to a 13-month high of 42.15 percent on Thursday--up from the 15-16 percent levels seen in mid-April. It plunged back to 28.84 percent yesterday after the European Union and International Monetary Fund set aside almost $1 trillion for a rescue fund. (See our Volatility Sonar report)
The largest trade occurred in HIG, where an investor sold more than 11,000 May 27 puts for $0.92 to $0.94 against open interest of 5,623 contracts. The life-insurance and asset-management stock rebounded 6.8 perecent to $27.02 in the session.
Some 5,832 May 50 puts were sold in TWC for $1.70, on a wager that the shares will push through $50 or at worse remain above $48.30. The stock ended the session up 0.40 percent to $49.67. Overall options volume in the company was seven times greater than average.
Call sales were also prevelant, surging to 58 percent more than usual, as investors looked to earn premium on companies such as Express Scripts.
(Chart courtesy of tradeMONSTER)
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
