Nibbling & Early Positioning

A quick options scan (not recommendations just observations) shows that some big bets continue to be made against the market.

The call screener was very quiet, aside from a strangle play in Guitar Center (GTRC). Recall, to much fanfare back in June, GTRC was to be bought by Bain Capital at $63. The stock finished today at $57.95. Volume in the GTRC chain was nearly dead, but more than 5,000 calls traded in the November 60 strike, and more than 5,000 puts traded in the November 55s.

On the Dow Diamonds (DIA), a usually fairly quiet options play, more than 12,000 contracts traded in to the September 129 and 128 strikes. The volume was more than enough to exceed open interest in both strikes.

In the iShares Russell 2000 (IWM), there was plenty of spread trading action in the September and October contracts, but one play that caught my eye was the October 70 strike where over 50,000 contracts traded vs open interest of just 3k. The IWM is presently at 78, a swoon to 70 would exceed the worst of the August intraday lows.

There was also a smattering of out of the money put trades in Financial SPY (XLF) puts that exceeded open interest in the October 35 and 30 strikes.

Garmin's (GRMN) chart is featuring what appears to be a spectacular double top chart ($104 area) that to some means trouble. Volume exceeded 5,000 contracts in both the October 90 and 85 puts (bearish time spread?). Volume was high enough to exceed open interest in the October 90 strike.