Schaeffer's Trading Floor Blog
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are technology guru Apple Inc. (NASDAQ:AAPL), agriculture giant Potash Corp./Saskatchewan (USA) (NYSE:POT), and athletics retailer Dick's Sporting Goods Inc (NYSE:DKS). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on AAPL, POT, and DKS.

  • While AAPL has remained relatively stagnant on the charts over the past month, option traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been upping the bearish ante. In fact, the equity's 10-day put/call volume ratio of 0.71 at these exchanges ranks higher than 90% of comparable readings from the past year, indicating long puts have been picked up at an accelerated pace during the past two weeks, compared to long calls. Short-term option buyers can rest assured knowing they've gotten their contracts at a bargain price, as Schaeffer's Volatility Index (SVI) of 17% ranks 4 percentage points from a 12-month low. This means prices on short-term options are nearing annual-low levels, from a volatility perspective. At Monday's close, AAPL shares stood at $530.92.

  • On the other hand, POT speculators have bought to open nearly eight calls for every put during the past 10 trading days at the ISE, CBOE, and PHLX. The resulting call/put volume ratio of 7.91 ranks higher than all comparable readings from the past year, highlighting the annual-high rate of call buying, relative to put buying, of late. Potash Corp./Saskatchewan (USA) speculators can also purchase contracts at a cheaper-than-usual price, as the equity's SVI of 24% ranks in the bottom 19% of its 12-month range. On the charts, POT shares have bounced roughly 12% over the past three months to trade at $34.71.

  • Finally, DKS -- which has shed 6.5% year-to-date to trade at $54.33 -- has seen a slightly higher-than-usual rate of put buying, relative to call buying, in its options pits of late. This is evidenced by the fact that the equity's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.84 ranks in the 59th annual percentile. With Dick's Sporting Goods Inc reporting fourth-quarter earnings ahead of tomorrow's open, the stock's SVI comes in at 38%, which ranks in the 77th percentile of its 12-month range. In other words, short-term DKS options are relatively expensive right now.

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