Stocks quoted in this article:
The 20 stocks listed below have seen the highest total options volume over the course of the last 10 trading days. Data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White, and highlighted names are new to the list since the last study was run. One stock seeing notable activity among weekly options traders is Ford Motor Company (NYSE:F).
Virtually unchanged in today's session at $15.85, Ford Motor Company has not had the best year so far. While technically clinging to a 2.8% gain for 2014, the stock has faced continued resistance from its newly descending 32-week moving average. In late December, F shares closed below this trendline for the first time since October 2012, and have so far not managed a weekly close back north of this trendline. What's more, the stock has lagged the broader S&P 500 Index (SPX), in terms of relative strength, for the last month.
Despite this underperformance, however, the options crowd has taken a glass-half-full approach in recent months. During the last 50 trading days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), more than four Ford calls have been purchased to open for every put. The resultant call/put volume ratio of 4.37 is just 7 percentage points shy of an annual bullish high, reflecting that long calls (relative to puts) are seeing increased demand.
Calls have taken the spotlight again today, and among the most active strikes is the weekly 5/30 16-strike call, where nearly 3,800 contracts have traded. Nearly all of this volume has gone off at the ask price and implied volatility (IV) has ticked higher, both of which suggest the initiation of new bullish bets.
Given the calls' volume-weighted average price of $0.14, the breakeven level at expiration in two-plus weeks is $16.14, or the strike price plus the premium paid. Ford traded north of this level as recently as May 1, and delta on the option is 0.42, suggesting a greater than 2-in-5 chance that Ford Motor Company (NYSE:F) shares will be trading above the 16 strike when options expiration rolls around.
Even if the stock continues to chug sideways (or even move lower), however, the most the options speculators have risked is 100% of the premium paid. Since the stock's 30-day at-the-money IV reading dipped to a new 52-week low of 16.2% earlier today, that premium is deflated, from a historical perspective.