The first trading session of the week is only halfway complete, yet options volume on Lumber Liquidators has already surpassed the stock’s average daily options volume of around 38,000 contracts amid continued vicious selling in the underlying. Shares in LL are down another 11% today and trading below $30.00, the lowest level since June 2012, as the stock continues to suffer in the wake of a 60 Minutes documentary and comments from short sellers. Options implied volatility is up more than 12% on the session at 115% as of midday.
Snapshots of option volumes and open interest across all expiries and striking prices on Lumber Liquidators reveals notable differences. Open interest in call options is heaviest in what are now far out-of-the-money contracts, notably the 65.0 strike calls, while put open interest is greatest in deep in-the-money contracts, namely the 60.0 strike puts.
Meantime, today’s action in LL options is dispersed across a wider swath of striking prices, perhaps as some traders look to position for further damage to the share price. March expiry put options at the 17.0, 20.0, 21.0 and 22.0 strikes are in play today, roughly 25-40% out-of-the-money versus today’s current share price.
Chart – LL open interest levels across expiries and striking prices
Chart – LL volume snapshot 3/9/15 at midday
