Option Block 357: AMZN Call Buyers Get Crushed
Trading Block: Markets mostly unchanged in modest volume. Apple posts decent numbers but disappoints overall. Amazon earnings after the bell. OX clients still buying far OTM calls? Facebook rallies $4.50 post earnings and trades over 1m contracts. Ford announced before open. Not much of an event.
Odd Block: Call buyers trade in Wisconsin Energy Corp (WEC), spreads go up in iShares Dow Jones US Homebuilders Index ETF (ITB), call buyers trade in Navios Maritime Holdings Inc (NM), and block prints in WhiteWave Foods Co. (WWAV)
Xpress Block: Alex showcases "The Dragon,” an OX tool that allows you to find unusual activity.
Mail Block: Listener questions, comments, and suggestions
- Question from Sea Biscuit: How do the market makers figure into open interest? Do they essentially double all of the OI because they are taking the other sides of every trade? Should i divide all OI numbers by two to get the real activity or is that already done for me?
- Question from Avon Man: Just to clarify on the conversation from last week, Alex said OI was broken down from each exchange and then netted with market maker activity. So if customer A buys 10 calls on Arca and then customer b sells 10 of those same calls on Arca, both opening, that would be net 0 open interest because they are on the same exchange? But if customer B sells those same calls on a different exchange, let's say NASDAQ, then it would be net 20 calls open on the strike because it’s two different exchanges? Is that right?
- Question from Alex C: Facebook looking strong post earnings. What option trades do you guys like out there right now, if any? Thanks for the shows. Just checked out Advisors Option for the first time as well. Very timely as I am in the process of picking an advisor.
Around the Block: Earnings-palooza continues