Unusual Options Activity in Honeywell International Inc. (HON)
In the market capitalization-weighted index NASDAQ Global Select Market Composite (NasdaqGS), we saw unusual activity in Honeywell International Inc. (HON), which opened today at $183.12.
- There were a series of even-sized orders in the amounts of 50, 70, and 90 contracts traded at a time on the $187.5 strike put option dated for March 11th, 2022.
- These orders are unusual as the chain had no open interest prior to today, implying the traders here are the first to open positions on this chain historically.
- By clicking on the ↕, it is revealed these orders came in with $195 strike put options dated for February 25th, 2022; however, the open interest on this chain was approximately 666, and the volume of 90 would not be enough to make the distinction as to whether they were opened or closed.
- However, intuition might tell us these contracts were being rolled to a later expiration and at a closer strike price. Read this Twitter thread for another example on this distinction.
A tip from the flow: Trades appended with the ↕ emoji are trades that have potentially came in together as a part of a strategy, and are coded accordingly as MLET or MLFT, under the codes column. Click on that emoji will open all of the trades that came in together so that the holistic strategy may be investigated.
Additionally, these orders come after RTTNews reported that: “AstraZeneca, Honeywell To Develop Respiratory Inhalers With Near-zero GWP Propellants”.
In spite of the aforementioned unusual activity, the largest premium bets are still bullish as of this writing. 69.8% of the premium traded is in bullish bets, with only 8.8% of the premium traded in calls, with 39.1% as ask-side orders. The put call ratio for Paysafe is 1.037, which is bearish.
A tip from the flow: The put/call ratio (P/C) is put volume divided by call volume. Put/call ratio is important and can be an indication of sentiment shifting. A P/C greater than .7 means more puts are being bought than calls, so the trend is getting bearish. A P/C of .7 to .5 is becoming more bullish. (This distinction is made because more calls are often traded than puts, so a P/C of 1 is outside of the median.)
Unusual Options Activity in Paysafe Limited (PSFE)
Today, February 22, 2022, among the underlying components of the NYSE, we saw unusual or noteworthy options trading volume and activity in Paysafe, which opened at $3.06.
- There have been a series of orders on the $3.5 strike call options dated for February 25th, 2022, bought to open at the ask with spot prices ranging from $0.08 to $0.1.
- These orders were significant as the chain itself was of low open interest and the repeated orders this morning were significant in volume, amounting to over 2,909 contracts traded versus the 858 open interest as of today’s open.
Be mindful, these orders come just ahead of Paysafe reporting its earnings on March 2nd, 2022 before the market opens.
Additionally, these orders come after Steve Booyens from InvestorPlace opined: “Hedge Funds are Selling Paysafe at the Wrong Time”.
While the significant volume increase on this chain over its open interest is noteworthy, volume alone does not give an indication as to whether these calls were bought or sold to open. Calls are not necessarily bullish and puts are not necessarily bearish: calls and puts can be bought and sold.
Unusual Options Activity in Analog Devices, Inc. (ADI)
Finally, and again in the NasdaqGS, we saw unusual or noteworthy options trading volume and activity in Analog Devices, Inc. (ADI), which opened today at $158.90.
- There were 4,999 contracts traded on the $150 strike put option dated for April 14th, 2022 that were canceled; the order then returned at an updated spot price of $4.55 and the bid-ask range had shifted slightly to $4.50 to $5.40.
- The open interest on this chain was only 13 contracts open this morning, and the premium traded in this single lot was approximately $2.3M.
- Please note, trades that are struck through have been canceled for one reason or another. Trades can be modified or nullified for a variety of reasons, and per the SEC: for the maintenance of a fair and orderly market. Exchanges can erroneously send more trades than were actually placed, especially during times of high volume. This is a normal occurrence.
Be mindful, Analog Devices goes ex-div on February 24th, 2022.
A tip from the flow: Beware of ex-dividend dates! You might want to avoid trading calls surrounding a stock's ex-dividend date, even if the options order flow shows a lot of call volume: You might be seeing traders that are looking to capture as much of the dividend as possible, who are looking to exercise deep ITM call options.
As of this writing, Analog Devices has had 11,166 puts traded, which is 223% greater than its 30-day put average.