Schaeffer's Trading Floor Blog

Options Check-Up: Amazon.com, Inc., Nokia Corporation (ADR), and QUALCOMM, Inc.

Analyzing recent option activity for AMZN, NOK, and QCOM

by 5/19/2014 5:00 PM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are e-commerce concern Amazon.com, Inc. (NASDAQ:AMZN), telecom company Nokia Corporation (ADR) (NYSE:NOK), and digital communications specialist QUALCOMM, Inc. (NASDAQ:QCOM). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on AMZN, NOK, and QCOM.

  • AMZN options bears have been relatively busy of late, as evidenced by the equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.23, which ranks just 1 percentage point from a 12-month peak. In other words, speculators have bought to open AMZN puts over calls at a near-annual-high pace during the past two weeks. It's no wonder option traders are bearish toward Amazon.com, Inc., considering the shares have plunged 25.6% so far this year to trade at $296.76. Plus, the stock's Schaeffer's Volatility Index (SVI) of 26% ranks in the bottom one-fifth of its 52-week range, meaning premium on short-term AMZN options is attractively priced right now, from a volatility standpoint. Looking ahead, AMZN will host its annual shareholder meeting this Wednesday.

  • NOK, on the other hand, has seen more than five calls bought to open for every put during the past 10 trading days, resulting in an ISE/CBOE/PHLX call/put volume ratio of 5.55. What's more, this ratio ranks in the top 24% of its annual range, demonstrating an accelerated rate of NOK call buying, relative to put buying, recently. It seems these option bulls are betting on a rebound for the equity, which is down 10.9% year-to-date to trade at $7.23. Now is as good a time as any to purchase front-month options on Nokia Corporation (ADR), from a volatility standpoint, as the stock's SVI of 34% ranks lower than 95% of comparable readings from the past year.

  • Bearish bets on QCOM have been scooped up at a faster-than-usual pace recently, according to the stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.54, which ranks in the 66th annual percentile. Prices on QCOM's short-term options are relatively cheap right now, as the stock's SVI of 14% ranks just 6 percentage points from a 52-week low. Since the start of 2014, meanwhile, QUALCOMM, Inc. has been slowly chugging up the charts, tacking on 7.5% to perch at $79.81.

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