Last Week’s Top Options Rolls (FLML, HOT, CLNE, LEN, BBY)

Options expiration week is usually notable, always volatile, and frequently very useful for a number of reasons. This is the week when small players, large funds, and market makers square up their positions and take a good, long, and hard look at the positions they have on their books. Those that have been winners are taken off or hedged into expiration, but those that have been mediocre or losing positions require a much more difficult decision—keep your position or trash it. If traders wish to stick with the position, they will have to close the position in the front month and open a new one in a later month; this is known as an options roll. Note that only positions with the highest conviction will be rolled forward because believe you me—the Smart Money (hedgies, mutual funds, large banks) know how to take losses and walk away. In fact, their willingness to move on from losing trades is the single largest difference between retail and institutional traders. Here are some notable options rolls that occurred last week… • Saks Inc. SKS: 10,000 $7.50 calls rolled from August to November • Best Buy Inc. BBY: 10,000 August $31 puts rolled into the September $25 puts, purchased • Lennar Corp. LEN: 10,000 August $13 puts rolled into the September $12 puts, sold short • Flamel Technologies SA FLML: 8,713 $5.00 call options rolled from August to September • Starwood Hotels & resorts Worldwide HOT: 3,500 August $46 calls rolled into the September $47 calls for a net debit of $1.27 • Royal Caribbean Cruises Ltd RCL: 3,100 short August puts rolled into the September $25 puts, sold short 6,300 times • Comerica Inc. CMA: 3,000 August $35 long puts rolled into the September $35 puts, purchased • Clean Energy Fuels Corp. CLNE: 3,000 August $16 puts rolled into the September $15 puts, sold short; options volume was 12x the average daily volume • International Rectifier Corp. IRF: 2,500 August $20 puts rolled into the September $20 puts, purchased; put volume was 25x the daily average volume • Mednax Inc. MD: 1,165 August $50 puts rolled into the September $50 puts, purchased For more great research like this, as well as how to play them through options…please visit Benzinga’s Options & Volatility Edge and Benzinga’s Cash Generator.