Another year and a host of risks permeate the system. Greece and Ireland have been handed some band aides and seem to be quietly tucked some where in the quieter section of the infirmary. With bigger patients awaiting treatment – read Spain – Portugal – and Italy the words to big to repair – as opposed to – too big to fail come to mind. This along with evidence that economic activity is picking up seems to be triggering a decent amount of put structure buying in the ED options – see players list below.
The longer end of the market still technically looks like prices should work higher – which of course is counter to the notion of stronger growth starting to emerge. But again markets can rally higher – counter to fundamental trends – due to the fact that a lot of activity and notions do get priced in – say in November and December and than when January arrives a correction of those trades can occur. Anyway that is what is being noticed as that weekly RSI on the 10yr. note remains over sold – currently reading 28.5 which is below 30. Again the chart clearly indicates this is not a place to be selling, (scroll back to 12/17 for picture on weekly RSI). The sideways price action has not been rewarding for longs – however selling puts – say the 118.5 strike and below would be working well and may still be worth a shot.
In 10's the selling in the Feb. 121 calls looks to be liquidating - we were seeing decent buying in that strike last week - and alas market has not been rallying. Will check open interest on those tomorrow. Actually after looking back they did buy a lot of the 121 calls vs. selling 122.5 calls - and did buy some outright. Clearly this looks like liquidation which may leave them unhedged (short on the 122.5 calls) stay tuned.
| 1/3/2011 | |||||
| Screen trades a.m. | |||||
| Paper | B | 1,000 | EOF/EOG/EOH 87/90 p stprip | 19 to 20 | 9900/9900.5 |
| Paper | B/S | 1,000 | EOF 9850/9875 p sprd | 1.5 | 9900/9900.5 |
| Paper | B | 3,000 | EDH 9962 call | 7.5 | ^9964 - 100% |
| This equates to the straddle trading 13.5 - was quoted 13/13.5 just prior to this trade. | |||||
| Paper | B | 5,000 | EDH1 93/95/96 p fly | 0.75 | 9963.5/64 |
| Paper | S | 500 | EDH3 9800p vs EOH 9887 p | 21 (EDH3 over) | N/A |
| Paper | S | 200 | EOF 9900 strad | 16 | N/A |
| Paper | B | 5,000 | EOM 9775/9800 p spread | 3 | 9872 area |
| TJM | B | 5,000 | EDH1 9912 put | 2 | 9963.5/64 |
| TJM | B | 5,000 | EDH1 9900 put | 1.5 | 9963.5/64 |
| Paper | B | 2,000 | EDH1 92/95 p spread | 2 | N/A |
| Paper | B | 2,500 | EOZ 9775/9825 pspred vs EDZ 9800 p | 8.5 EOZ over | N/A |
| Fed Fund | |||||
| Paper | B | 500 | FFN/U 9975/9981 p spred calendar | .5 (Sep. over) | N/A |
| 10yr. Screen | |||||
| Paper | B/S | 250 | TYG 121/122/123 c fly | 0.08 | 11925/25.5 |
| Open outcry | |||||
| Merril | S | 500 | TYH118p | 0.53 | N/A |
| CCM | S | 1,500 | TYH 120 strad | 2.59 to 2.58 | ^11925 |
| Merril | S | 1,000 | TYH120.5c | 1.04 | ^11920 |
| New Edge | B | 1,000 | TYH119.5c | 1.35 | 11920.5/21 |
| Merril | S | 1,000 | TYH118p | .55 and .54 | 11916.5 to 19 |
| CSFB | S | 5,000 | TYG121c | .28 and .27 | 11924 to 26 area |
| Paper | B | 1,000 | TYH117/119 pspread | 0.38 | 11925/25.5 |
| 30yr. | |||||
| Paper | S | 750 | USG 119p | .47 to .49 | N/A |
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