Schaeffer's Trading Floor Blog

Options Check-Up: Amazon.com, Inc., Carnival Corporation, and Citigroup Inc

Analyzing recent option activity for AMZN, CCL, and C

by 6/23/2014 4:55 PM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are online retailer Amazon.com, Inc. (NASDAQ:AMZN), cruise line Carnival Corporation (NYSE:CCL), and banking giant Citigroup Inc (NYSE:C). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on AMZN, CCL, and C.

  • AMZN gained 0.9% today to finish at $327.24, but remains off roughly 18% on a year-to-date basis. Nevertheless, bullish betting has picked up in the retailer's options pits. During the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Amazon.com, Inc. has racked up a call/put volume ratio of 1.43, which ranks in the 94th percentile of its annual range. Given the equity's longer-term technical struggles, a capitulation among these option bulls could result in headwinds. Regardless, short-term AMZN options are relatively inexpensive right now, as the stock's Schaeffer's Volatility Index (SVI) of 26% is lower than 82% of all comparable readings taken in the last year.

  • CCL finished Monday's session 0.8% higher at $39.41, with investors eagerly awaiting tomorrow morning's second-quarter earnings report. Historically, the cruise ship operator tends to suffer in the aftermath of these events, despite beating analysts' per-share profit estimates in each of the past eight quarters. In late March, for example, the shares shed 5% in the session following an 8-cent earnings beat. Not surprisingly, option bears have been attracted to Carnival Corporation lately. The stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.71 sits in the 61st percentile of its 12-month range, meaning traders have scooped up long puts (relative to calls) at a slightly faster-than-usual clip during the previous two weeks. In terms of price, CCL's short-term contracts are currently about average, as the security's SVI of 26% rests in the 49th percentile of all readings from the last 52 weeks.

  • Finally, C gained 1.5% on Monday to close at $48.06, but is still standing solidly in the red in 2014. Moreover, the shares are currently battling overhead resistance at their 10-month moving average. As such, option traders have been upping the bearish ante. Citigroup Inc's 10-day put/call volume ratio on the ISE, CBOE, and PHLX checks in at 0.62 -- just 15 percentage points from an annual high. Short-term contracts can be had on the cheap, too, with C's SVI of 19% resting in the bottom quartile of all comparable readings recorded in the previous 12 months. Finally, on the news front, the U.S. banking titan agreed to sell its Spain-based consumer banking business to Banco Popular Espanol SA today.

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