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

Among the stocks attracting attention from options traders lately are online retailer E-Commerce China Dangdang Inc (ADR) (NYSE:DANG), enterprise software name Oracle Corporation (NYSE:ORCL), and Internet security firm Qihoo 360 Technology Co Ltd (NYSE:QIHU). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on DANG, ORCL, and QIHU.

  • DANG shot 8.1% higher to finish at $11.07, bringing its year-over-year gain to 138%. Also, the shares muscled back atop their 40-week moving average, after finishing below the trendline last week. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), however, E-Commerce China Dangdang Inc (ADR) has racked up a 50-day put/call volume ratio of 0.29, which is higher than 99% of comparable readings from the last year. If the equity can continue to run up the charts, a capitulation among these bears could stoke DANG's technical flames. No matter what happens, option players can rest easy knowing DANG options are lingering near historically low levels. In fact, although the company is slated to report earnings ahead of Thursday's open, the stock's Schaeffer's Volatility Index (SVI) of 81% registers in the 31st annual percentile. Of note, following its last turn in the confessional in late February, DANG proceeded to tack on 7.2% in the subsequent session.

  • ORCL gained 2.2% today to close at $41.95, but not before hitting a fresh 13-year peak of $42.14, thanks to a big legal victory against Google Inc (NASDAQ:GOOGL). Longer term, the shares have outperformed the broader S&P 500 Index (SPX) by 7 percentage points in the last 40 sessions. Nevertheless, Oracle Corporation's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.02 ranks near the top third of similar readings from the past 12 months. Should ORCL sustain its uptrend, an unwinding among bearish bettors could spell added upside for the equity. Meanwhile, options traders are paying a relatively modest sum for their wagers on the software giant, as the stock's SVI of 22% ranks in the 27th percentile of its annual range.

  • Finally, QIHU ran to a daily gain of 8.1% to finish the session at $83.98, meaning the security has more than doubled in value on a year-over-year basis. Not surprisingly, option bulls have taken a liking to the equity. Specifically, Qihoo 360 Technology Co Ltd boasts a 10-day ISE/CBOE/PHLX call/put volume ratio of 4.27, with long calls more than quadrupling long puts. This ratio sits just 1 percentage point from an annual bullish acme, as well. However, with earnings tentatively scheduled for next week, traders have paid a pretty penny for their bets on QIHU, as its SVI of 63% is higher than 62% of comparable readings from the last 52 weeks.

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