HTZ - Huge Options Bet in Sep

Discussion in 'Trading' started by livevol_ophir, Mar 4, 2010.

  1. livevol_ophir

    livevol_ophir ET Sponsor

    Details, charts, prices, trades, vols here:

    HTZ is trading 9.69.

    The company has traded over 21,000 options today on total daily average option volume of just 491 - that's 4,300% of it's average. The largest trade was the selling 10,500 (21,000 contracts) of the Sep 10 straddle @ ~$2.70. The Stats Tab and Day's biggest trades snapshots are included (in the article).

    The Options Tab (in the article) illustrates that the calls are at least mostly opening and ther puts are essentially all opening (compare OI to trade size). You can also see that Sep vol is the highest of all months - even more than June which has earnings (a vol event).

    Finally, the Charts Tab (6 months; vol only section) is in the article. The yellow shaded area at the very bottom is the IV90&#8482 vs. the IV30&#8482 vol difference.

    You can see in the upper left that HV120&#8482 (purple) has fallen hard and is now "flat lining." IV120&#8482 (green line) is still above the HV120&#8482 and still above the IV30&#8482 (red line). I don't have a big opinion here, but I can see why this could be a sale.

    The straddle makes money on Sep expo if 7.30 < HTZ < 12.70. Before expo, this makes money with a vol decrease, or a vol stays the same, stock stays the same and time passes (time decay). Max gain is with the stock on $10.00 at expo for a potential gain of $2.70*10,500*100 = $2,835,000.

    This is trade analysis, not a recommendation.

    Details, charts, prices, trades, vols here: