Notable Wednesday Option Activity: MCK, RKLB, BMY

Rocket Lab (RKLB) saw 119,845 options contracts trade (≈12.0M underlying shares), about 47.5% of its one-month average daily volume (25.2M), with elevated activity in the $70 put expiring Feb 6, 2026 (3,659 contracts ≈365,900 shares). Bristol Myers Squibb (BMY) recorded 59,498 contracts (≈5.9M shares), about 46.9% of its one-month ADTV (12.7M), led by the $55 put expiring Feb 13, 2026 (7,697 contracts ≈769,700 shares). The prints indicate significant put interest and heavy options flow in both names that could amplify intraday price moves.

Analysis

Market structure: The concentrated put flow in RKLB (119,845 contracts ≈12.0M shares, ~47.5% of ADV) and BMY (59,498 contracts ≈5.9M shares, ~46.9% of ADV) signals large institutional directional or hedging activity rather than retail noise. That order flow will push up implied volatility (IV) and skew, force dealer delta-hedging (likely selling stock into weakness) and create short-term liquidity demand in the underlying over the next 3–10 trading days. Expect increased bid/ask friction and wider spreads for RKLB (small-cap, higher gamma) versus BMY (large-cap, lower gamma) with potential short-term negative price pressure concentrated near the concentrated strikes ($70 RKLB, $55 BMY).

Risk assessment: Tail risks differ by name — RKLB is exposed to operational/financing tail risk (launch failure, equity raise) that could cascade into accelerated dilution within 3–6 months; BMY faces regulatory or trial headlines with event risk over 1–12 months. Hidden dependency: large long-dated put buys (Feb 2026) suggest either long-term hedges or block trades tied to other OTC or structured notes; unwind could be abrupt if buyers are hedgers. Catalysts to watch in the next 30–90 days: 13F/13D/8-K filings, scheduled trials/earnings, and any announced equity offerings.

Trade implications: Short-term (days–weeks) trade the volatility dislocation: for RKLB, prefer buying a defined-risk put spread (buy Feb-2026 $70/$50) sized 0.5–1.5% notional if price breaches $70; avoid outright long puts if IV > historical 90th percentile. For BMY, consider selling a 60–90 day put spread (sell $55 / buy $50) for credit if IV stays elevated and fundamentals intact, or buy cheap downside protection only if downside risk >5–8% vs current levels. Pair trade: long BMY vs short a mid-cap biotech (e.g., size 1:1) to capture defensive rotation; cap individual trades to 1–2% NAV.

Key Decisions for Investors

• RKLB: If RKLB trades at or below the $70 strike within 10 trading days, establish a defined-risk bearish position sized to 0.5–1.5% of NAV by buying the Feb 2026 $70/$50 put spread (limit max loss to premium paid); this captures downside while capping cost in elevated IV.
• BMY: Sell a 60–90 day put spread (sell Feb/Mar 2026 $55 / buy $50) for a net credit sized to 1% NAV if BMY remains above $58 and IV stays >30th percentile — target yield >4% annualized on notional, stop-loss if underlying falls >6% intraday.
• Volatility arbitrage: Enter a calendar skew trade when short-term IV > long-term IV by selling 30–45 day calls or strangles on RKLB/BMY and buying the Feb-2026 wings to convert into a calendar/diagonal, size overall vega exposure to <1% NAV and reassess weekly.
• Information triggers to act on (monitor next 30–90 days): take profits or unwind directional positions on filings (13D/8-K), announced equity offerings, or large insider/10b5-1 activity; if a 13F/13D or shelf appears for RKLB, trim long-risk immediately and size shorts up to 1–2% NAV.