High Options Volume in Teva Pharmaceuticals (TEVA): Are Investors Reacting to the Health care Reform Bill?

Quadruple witching last Friday proved to be a bearish day for the markets.  While it looked like the selling might continue this morning after the landmark passing of a sweeping healthcare reform bill through the Senate, the markets have not only recovered, but are rallying even after Tiffany’s (TIF) missed The Street’s earnings expectations even though sales of statement jewelry, or pieces that cost over $50,000.00, saw the first quarterly jump in at least a year.

After March expiration, options traders continued to shuffle positions around. The health-care bill passage could be causing some option volume spikes in:

Teva Pharmaceuticals (TEVA)

• Jan11 70.00 Calls: volume over 7116, versus open interest 2042

In another unrelated sector, Las Vegas Sands (LVS) saw some downside put selling in June; the 16 puts 4,000 were sold, indicating on the surface that at least one investor believes that LVS can stay above 16 through June expiration. Of course this does not mean that it will… LVS is currently trading at $20.20. The risk to the short put is the strike price minus the credit received.

Remember there are a few hours left in the trading day and the volume of these issues may continue to rise, but this is where we are seeing some heavy options activity today. Also remember that options can be bought or sold and volume does not indicate which.

These are a couple of my team’s observations this morning. If you have others you would like to add to this list, please feel free to add them in the comments.

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