Schaeffer's Trading Floor Blog

Options Check-Up: Apple Inc. (AAPL), JA Solar Holdings Co., Ltd. (ADR), and FedEx Corporation

Analyzing recent option activity for AAPL, JASO, and FDX

by 6/15/2014 6:49 PM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are technology bigwig Apple Inc. (NASDAQ:AAPL), alternative energy issue JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO), and package delivery concern FedEx Corporation (NYSE:FDX). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on AAPL, JASO, and FDX.

  • AAPL was the talk of Wall Street last week, with brokerage firms adjusting their positions to reflect the 7-to-1 stock split. Most recently, BMO revised its price target to $98 Thursday night, while Raymond James offered up a price target of $102 -- both firms also reiterated their "outperform" ratings on the equity. Meanwhile, the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.02 ranks in the 79th annual percentile, demonstrating AAPL option traders have placed bullish bets over bearish at a faster-than-usual pace during the last two weeks. One good thing about purchasing short-term options on Apple Inc. now is the equity's Schaeffer's Volatility Index (SVI) of 18% ranks in the bottom 12% of its 12-month range, meaning these contracts are attractively priced, from a volatility perspective. On the technical front, AAPL shares have been on the run lately, climbing 8.3% over the last month to perch at $91.15.

  • Calls bought to open on JASO have outnumbered puts by a more than 5-to-1 margin in recent sessions. However, on a relative basis, the latter have been purchased at an accelerated rate, as the equity's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.19 ranks higher than 63% of similar readings over in the last year. Meanwhile, JA Solar Holdings Co., Ltd. (ADR) -- perched at $9.87 -- has been wrestling with resistance at the $10 mark since the end of April, and JASO option traders can purchase bets on its short-term trajectory at a relatively inexpensive price, with the stock's SVI of 61% ranking in the 16th percentile of its 12-month range.

  • It's FDX's turn to tell all in the earnings confessional before the market opens on Wednesday, and ahead of the quarterly event, the equity's long puts have been in heavier-than-usual demand, compared to long calls. In fact, the stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.75 ranks higher than 93% of similar readings taken over the past 12 months. Meanwhile, FedEx Corporation's SVI of 24% is sitting in the 52nd annual percentile, indicating premium on short-term options is relatively average right now. On the charts, the equity is trading 2.6% lower year-to-date at $140.09.

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