Unusual Options Activity in American Airlines Group Inc. (AAL)
Today, March 18, 2022, in the NasdaqGS, there was unusual or noteworthy options trading activity in American Airlines Group Inc. (AAL), which opened at $16.35.
- There were a series of orders on the $19 strike call option dated for April 14th, 2022, traded at the ask of $0.35 with a bid-ask spread of $0.32 to $0.35.
- The open interest on this chain was approximately 6,321 contracts open and the overall volume is now approximately 7,298, implying that a non-zero amount of these transactions are indeed being bought or sold to open, not closed.
- Additionally, these orders come after American Airlines said it will resume selling alcoholic beverages on certain domestic and short-haul international flights starting April.
Furthermore, these orders were also spotted on the NEW Unusual Whales hottest chains tool. As seen, the contracts had an acceleration factor of 0.99, implying there was a rapid increase in trading activity over open interest on this chain.
As stated, the volume on this chain has now increased in excess over the open interest, so some of these contracts must have been bought or sold to open, not to close.
Unusual Options Activity in Enova International, Inc. (ENVA)
In the NYSE, there was unusual or noteworthy options trading activity in Enova International, Inc. (ENVA), which opened today at $36.55.
- There were a series of above-ask orders on the $40 strike call options dated for June 17th, 2022.
- The overall volume on this chain has been approximately 2K and the open interest on the chain is 50; therefore, it may be intuited that these orders are being either bought or sold to open, not to close.
- As stated, these trades were above the ask, at a spot price of $2.65 and the bid-ask spread of $2.10 to $2.60.
- Additionally, these orders come after Zacks asked: “Is Enova International (ENVA) Stock Undervalued Right Now?”
A tip from the flow: When viewing alerts in the Unusual Whales flow alerts page, you can click “Link to flow” to view chain’s activity in the overall options order flow, as seen here:
These orders continued to trickle in at varying sizes, from a single contract to 88 or more and all of them were above the ask of $2.60 at the time of order entry.
Witching days occur once a quarter, (typically) on the third Friday of March, June, September, and December. These days are regularly occurring and are not anything nefarious in spite of their names--and those names are dependent upon the number of simultaneous expiration dates that are stacked on the date:
On quadruple witchings, all of the following expire simultaneously:
- stock options
- stock index options
- single stock futures
- and stock index futures
Triple witchings occur when three of the above expire simultaneously.
Double witchings are when two of the above expire simultaneously.
Prior to the close on a witching day, there is an increase in volume in trading as traders are rolling their contracts to further out dates, closing positions outright, and opening new positions altogether.
Be mindful! There is a considerable increase in volatility up into witching days. To some, there are "arbitrage opportunities" by trading this volatility.
Risk of Exercise & Assignment
Prior to witchings, market makers and brokers alike will require shares to cover their positions and their clients' positions; therefore, brokers have the right (and responsibility) to exercise existing contracts to obtain those shares in order to keep the markets operational.
Please be careful holding contracts through witching days unless you are taking advantage of those "arbitrage" opportunities yourself!