AMJ - Very Unsual Trading... In Unusual Investment Vehicle...

Discussion in 'Options' started by livevol_ophir, Oct 26, 2010.

  1. livevol_ophir

    livevol_ophir ET Sponsor

    AMJ is trading $35.09, up small with IV30™ up 5.5%. The <a href="">LIVEVOL™ Pro Summary</a> is <a href="">in the article</a>.

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    From the JPM website:
    "Launched in April 2009, the Alerian MLP Index ETNs leverage our trading expertise in MLPs to provide investors convenient access to this emerging asset class through a convenient investment vehicle."

    The ETN has traded 12,6000 options in one trade on total daily average option volume of just 220 (hello? 220?). I got color from stud broker Mike Bristow at Vtrader Group: "AMJ dec 35 - 36 c/stupid bot 6300 ~ .90."

    In English, someone bought 6,300 Dec 35 calls and bought 6,300 Dec 36 calls for $0.90 total (this is called a call stupid - same side twice). The Stats Tab and Day's biggest trades snapshots are included (<a href="">in the article</a>).

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    Ok, this is a weird trade. Now, I'm not saying, you know... But, I'm just saying... You know what I'm sayin'?

    Just another note here. The company averages 26 calls a day... 26!

    The Options Tab (<a href="">in the article</a>) illustrates that the calls are opening... duh... (compare OI to trade size). The 11,720 is a bit misleading as it it is counting a cancelled trade in there. The totals are 6,300 for both lines. The TOTAL open interest across ALL lines is 5,455, of which just 729 is in the calls. So the 12,600 open today is huge for this name.

    The largest single day option volume in the last two years in this name (other than today) is still less than 10,000 - and it was a standard put spread. The top volume days are:

    <b>10-26-2010: 12,600</b>
    7-23-2010: 8,374
    7-22-2010: 4,729
    7-21-2010: 3,071
    8-3-2010: 2,811
    9-10-2010: 2,036
    8-5-2010: 1,850
    8-23-2010: 1,342
    ... And then nothing over 1,000 as far as I can see...

    So, other than a one month period this summer, this thing has never traded over 1,000 contracts in the last 2 years.

    Finally, the Charts Tab (6 months) is <a href="">in the article</a>. I've just included the stock portion.

    We can see the stock has steadily climbed over the last few months from below $32 to now over $35.

    This is trade analysis, not a recommendation.

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  2. livevol_ophir

    livevol_ophir ET Sponsor

    Stock is creeping up...