Schaeffer's Trading Floor Blog

Options Check-Up: Citigroup Inc, Coach Inc, and Starbucks Corporation

Analyzing recent option activity for C, COH, and SBUX

by 5/14/2014 5:24 PM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are financial firm Citigroup Inc (NYSE:C), upscale accessories name Coach Inc (NYSE:COH), and coffee king Starbucks Corporation (NASDAQ:SBUX). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on C, COH, and SBUX.

  • C closed 0.6% south of breakeven today at $47.12, after the bank announced it had fired 11 employees involved in a Mexico-based fraud case. On the year, the shares are down more than 9.5%. Meanwhile, on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Citigroup Inc has racked up a 10-day put/call volume ratio of 1.01, which rests just 1 percentage point shy of a 12-month high. These bearish bettors have been paying a relatively slim sum for their options, too, as C's Schaeffer's Volatility Index (SVI) of 17% is lower than 99% of comparable readings from the past year.

  • COH finished the day 1.5% lower at $41.58, but not before hitting a multi-year bottom of $41.44. Year-to-date, in fact, the equity has shed 26%. In the options pits, Coach Inc's 10-day ISE/CBOE/PHLX call/put volume ratio of 1.24 ranks in the 90th percentile of its annual range -- though some of this call buying may be at the hands of short sellers looking to hedge against an unexpected rally, as 10.3% of the stock's float is sold short. Regardless of the motive, options traders have picked up their bets on the cheap; COH's SVI of 20% is higher than just 9% of all other readings recorded in the last 52 weeks.

  • Finally, despite announcing plans to expand further into Latin America, SBUX lost 1.4% today to close at $70.17, bringing its year-to-date deficit beyond 10%. Accordingly, the java giant's 10-day ISE/CBOE/PHLX put/call volume ratio registers at 0.90, lower than only 16% of similar readings from the past year. Option bets on Starbucks Corporation can be had at a relative bargain, as well; the stock's SVI of 17% rests just 4 percentage points shy of a 12-month nadir.

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