Stocks quoted in this article:
Among the stocks attracting attention from options traders lately are networking giant Cisco Systems, Inc. (NASDAQ:CSCO), mining issue Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), and alternative energy concern JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on CSCO, FCX, and JASO.
- CSCO is in the red on a year-to-date basis, and slid 1.3% to $22.02 today after Spherix Inc announced it has sued the Dow component for alleged patent infringement. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Cisco Systems, Inc. has received plenty of bearish attention recently. The stock's 50-day ISE/CBOE/PHLX put/call volume ratio of 0.75 registers in the 93rd percentile of its annual range, suggesting traders have been scooping up bearish bets relative to bullish at a faster-than-usual clip during the last 10 weeks. From a historical perspective, short-term options on CSCO can be had for a relative bargain, as CSCO's Schaeffer's Volatility Index (SVI) of 17% is lower than 94% of similar readings from the past year.
- Despite gaining 2.3% to close the session at $32.41 -- helped by a deal with Indonesia related to export taxes -- FCX is a long-term technical laggard, down roughly 2% year-over-year. In the options pits, calls have been bought to open by a better than 2-to-1 margin in the last two weeks, as evidenced by the stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 2.29. However, this figure is in the 49th annual percentile, meaning it's about average for Freeport-McMoRan Copper & Gold Inc., relatively speaking. Regardless, front-month FCX options are reasonably priced right now, as the equity's SVI of 28% falls in the bottom one-third of comparable readings from the last 12 months.
- JASO finished Thursday 2.7% higher at $9.88, bringing the solar stock's annual gain to roughly 173%. On the ISE, CBOE, and PHLX, traders have bought to open 10 calls for every put during the past two weeks, per the stock's 10-day call/put volume ratio of 10.01. However, this ratio is only slightly higher than usual, as it ranks in the middling 55th percentile of its annual range. Meanwhile, short-term options are relatively affordable right now, based on JA Solar Holdings Co., Ltd.'s (ADR) SVI of 64%, which checks in lower than 85% of other such readings taken in the previous 52 weeks.