Unusual Options Activity in Dynatrace, Inc. (DT)
Today, January 06, 2022, among the underlying components of the NYSE, we saw unusual or noteworthy options trading volume and activity in Dynatrace, which opened at $52.65.
- There were 12,040 contracts traded on the $60 strike call option dated for February 18th, 2022, traded at the bid.
- Additionally, there were 9,800 contracts bought to open on the $55 strike call option for the same date.
These orders came in tagged as “floor”. Floor traders work on the floor of an exchange. When a floor trader executes a trade, exclusively for their own account, it must be reported on an exchange by the "floor" tag.
On the Unusual Whales blog is a report on floor traders' performance. Here is a snippet:
More interestingly, we found that floor traders do not bet on crazy far OTM calls. Instead, most of the purchased weekly calls are ~10% ITM, with about a 40% chance to turn a profit. And when it comes to OTM calls, nearly half of these trades end up making gains and roughly a third of them can hit 50% and above.
These orders come after BNK Invest reported that:
“In trading on Wednesday, shares of Dynatrace Inc (Symbol: DT) entered into oversold territory, hitting an RSI reading of 29.1, after changing hands as low as $53.365 per share.”
The volume, as such, is entirely novel and overshadows any previous open interest on the chain, implying these contracts were in fact either bought or sold to open, not closed.
Unusual Options Activity in Energy Transfer LP (ET)
Again in the NYSE, we saw unusual or noteworthy options trading volume and activity in Energy Transfer LP (ET), which opened today at $9.08.
- There were 10,000 contracts traded on the $9 strike call option dated for January 14th, 2022. The open interest on this chain was approximately 7,000 contracts in circulation as of this morning’s open.
- Additionally, there were 10,000 contracts traded on the $9 strike call option dated for January 7th, 2022, and its open interest was approximately 24,000 as of this morning.
Therefore, it can be interpreted that the $9 call options for January 14th are being bought to open, and those expiring tomorrow, the 7th, are being sold to close. This deduction can be confirmed by looking at the open interest on the chain tomorrow, as we have reported elsewhere.
A tip from the flow: Trades appended with 🛍️ can be intuited as bought or sold to open. This determination is made if the size of the trade was greater than the chain's open interest. Only trades that can be positively identified as being bought or sold to open will be marked as such (with the 🛍️ symbol). Be mindful! Trades without the 🛍️ symbol might still have been bought or sold to open!
The open interest on this chain remains higher than the volume thus far today, particularly from this order, so therefore it cannot be established whether these orders were opened or closed from open interest alone.
However, with the deductions established above, as we know these orders came in together with the January 14th expirations, they can be assumed has having been closed today.
Unusual Options Activity in Halliburton Company (HAL)
Finally and again, in the NYSE, we saw unusual or noteworthy options trading volume and activity in Halliburton Company (HAL), which opened today at $25.98.
- There were 4,800 contracts traded on the $25 strike put option dated for January 21st, 2022.
- Additionally, there were 4,800 contracts traded on the $25 strike put option dated for February 18th, 2022.
- By contrast of the previously reported unusual options, the shorter dated strike for January 21st is not being closed here, as its open interest was approximately 3,000 this morning, and therefore this volume is novel, implying the contracts were in fact bought or sold to open.
Assuming this is the case, this strategy is a calendar spread.
A calendar spread is opened by selling a closer dated position to collect a credit and then purchasing the same strike further out to "protect" that up-front short-dated position. This position profits more from higher IV close to the date of the short position, such as by an upcoming earnings report.
These orders come before Halliburton reports its earnings on January 24th, 2022.
The volume today has overtaken the open interest, and as this was from the solitary order above, thus far, it can be intuited these were “to open” transactions.