$HCG Home Capital Group #Canada #Mortgage #Bubble #stock #options chain to analyze open interest the day before the huge collapse and volume

The following set of option chains are from mid-day trading on April 26, 2017.

Canada’s Housing Bubble Explodes As Its Biggest Mortgage Lender Crashes Most In History

Home Capital shares plunge after mortgage lender seeks $2 billion credit line as deposits decline

The below set of option chains are taken end of day on April 26 2017:

 

$EROS rebuts @GeoInvesting article, interesting #option #trading flow

Yesterday The GeoTeam published a negative biased article written about EROS. This morning the company publicly responded via a rebuttal press release. And at 1:42 PM EST on March 09 2017, I just looked at the most active options that have traded today, and to me it looks like very bullish flow in the options trading today.

here is the most active options after the close:

UPDATE 03-09-2017 8:54 PM EST  — In the previous “most active options” screenshots, I made a judgement that the flow looked bullish, however once I was able to login to my ThinkOrSwim platform and actually see the option time & sales and I’m getting a different read on this.

It looks like somebody is actually buying deep in the money March-2017 and Sept-2017 $15 put options.  That means this trader expects the share price to decline further.  Buying deep in the money options is relatively cheaper than it is to buy out of the money options, time decay is the smallest in these options, meaning your option premiums don’t evaporate as quickly as out of the money options do.

The Sept-2017 $10 put strike is another interesting contract which had 442 contracts traded today compared to 17 open interest.

EROS-Sept-2017-Puts-10-dollar-strike

And if you review the option time & sales for the EROS Sept-2017 $10 put strike, it appears as though these contracts are being sold at the bid, this would set this particular trader in a very bullish position with respect to the direction of the stock price.

I’m also see some straddle positions consisting of the Sept-2017 $7.5 Put and the Sept-2017 $15 Call.  I think this trader has sold these contracts naked, which means as long as the EROS stock price ends up somewhere between $7.50 and $15.00, the trader will make a profit.  Also judging by the time & sales, comparing the time and size of the volume with the at which the straddle (Sept-2017 $7.5 Put and Sept-2017 $15 Call) and the Sept-2017 $10 Put selling, the trader who placed these trades could be the same person.  Selling those Sept-2017 $10 Puts around a price of $2.25 would put the break even for this position to be $7.75.  So provided EROS doesn’t fall below $7.50-$7.75, this trader could make a lot of money with the option positions placed.

EROS Options Time + Sales 03-09-2017-1
EROS Options Time + Sales 03-09-2017-2
EROS Options Time + Sales 03-09-2017-3
EROS Put Impl Vol Smile