Schaeffer's Trading Floor Blog

Options Check-Up: Apple Inc. (AAPL), SunPower Corporation, and DryShips Inc.

Analyzing recent option activity for AAPL, SPWR, and DRYS

by 4/1/2014 5:42 PM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are tech heavyweight Apple Inc. (NASDAQ:AAPL), alternative energy provider SunPower Corporation (NASDAQ:SPWR), and shipping concern DryShips Inc. (NASDAQ:DRYS). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on AAPL, SPWR, and DRYS.

  • With AAPL down an uninspiring 3.5% year-to-date to trade at $541.65, long put activity (relative to long call activity) is nearing annual-high levels in the equity's options pits. To be specific, AAPL's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.76 ranks just 1 percentage point from a 12-month peak. Furthermore, the stock's Schaeffer's Volatility Index (SVI) of 20% ranks in the 4th annual percentile, indicating short-term options on Apple Inc. are attractively priced, from a volatility perspective.

  • SPWR sports an impressive 191% year-over-year climb to linger at $32.58. However, the stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 3.38 ranks in the 40th annual percentile, demonstrating the recent rate of call buying, relative to put buying, is slower than usual. Meanwhile, SunPower Corporation's SVI of 46% ranks the lowest of all comparable readings from the past year, indicating prices on the equity's short-term options are at annual-low levels. This is good news for short sellers who may be picking up options-related insurance on their bearish bets -- short interest accounts for a lofty 38.5% of SPWR's float.

  • While DRYS' 10-day ISE/CBOE/PHLX call/put volume ratio of 19.09 appears top heavy, it is actually relatively normal for the stock, as the current reading ranks in the middling 52nd annual percentile. Right now, speculators can purchase short-term contracts on DryShips Inc. at a discount, as the equity's SVI of 61% ranks lower than 80% of similar readings from the past year. On the technical front, DRYS is down 30.2% year-to-date to trade at $3.28.

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