Shipping stock delivers options volume

06/16/21
  • JBHT put options volume more than 26 times average on Tuesday
  • Activity was mostly in June options (expiring this Friday)
  • Stock has been consolidating since pulling back to former breakout level

Although quarterly “witching” expirations may not necessarily produce volatility fireworks the way they used to, that doesn’t mean there can’t be exceptions to the rule. And sometimes options activity can highlight potential trade maneuvering that isn’t apparent in a stock’s price.

For example, with four days remaining until June equity options expire on Friday, traders put up big numbers in the options of freight and logistics company J.B. Hunt Transport (JBHT). Almost 161 puts changed hands for every call—the fourth-highest put-call ratio Tuesday morning:

Chart 1: LiveAction scan: Highest put-call ratios, 6/15/21. Unusual options activity. Nearly 161 puts for every call.

Source: Power E*TRADE


That was definitely the trading epicenter, by the way: Although JBHT’s put volume was roughly 26 times its daily average, its stock volume was slightly below average as shares traded in slightly positive territory for much of the morning.

JBHT’s options chain showed almost all the day’s options volume was concentrated in the June $160 and $170 puts—2,000 contracts a piece:

Chart 2: JBHT June put options, 6/15/21. J.B. Hunt (JBHT) options chain.  Big trades in June $160, $170 puts.

Source: Power E*TRADE


Not only were those options the most actively traded, they had the highest open interest (OI) of any contract, call or put, although both the June $170 and $180 calls also had OI above 2,000.

With the caveat that it’s always impossible to know the “reason” behind any individual print that crosses the tape (was it initiated by option buyers or sellers, was it an opening or closing position, etc.?), some traders may have taken note of JBHT’s options activity in light of its price chart, which shows the stock has been in a tight consolidation for several days after pulling back to the breakout level (roughly $164.40) of its March trading range:  

Chart 3: J.B. Hunt Transport (JBHT), 1/7/21–6/15/21. J.B. Hunt Transport (JBHT) price chart. Consolidating as expiration approaches.

Source: Power E*TRADE


Yes, trading ranges—like trends—often last much longer than people expect. But while there’s no way to know if yesterday’s traders were expecting JBHT to stay within its recent range or break out of it, given the narrowness of the consolidation, the high options volume, and the wild card of a looming expiration, even if the stock doesn’t appear on any more LiveAction scans, it may keep its place on many trader screens—at least through the end of the week.

Market Mover Update: Autohome (ATHM) slid again yesterday, falling more than 5% intraday to its lowest level since March 2020 (see “Capitulation watch”). July WTI crude oil futures (CLN1) topped $72/barrel intraday on Tuesday, and closed up for the fourteenth time in the past 18 days.

Today’s numbers include (all times ET):  Mortgage applications (7 a.m.), Housing Starts and Permits (8:30 a.m.), Import and Export Prices (8:30 a.m.), Atlanta Fed Business Inflation Expectations (10 a.m.).

Today’s earnings include: Lennar (LEN).

Today’s IPOs include: Molecular Partners (MOLN), WalkMe (WKME), Convey (CNVY).

 

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