Schaeffer's Trading Floor Blog

Options Check-Up: Facebook Inc (FB), Ford Motor Company, and Darden Restaurants, Inc.

Analyzing recent option activity for FB, F, and DRI

by 3/19/2014 5:02 PM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are premier social network Facebook Inc (NASDAQ:FB), automaker Ford Motor Company (NYSE:F), and restaurateur Darden Restaurants, Inc. (NYSE:DRI). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on FB, F, and DRI.

  • Though FB has advanced 24.9% year-to-date to trade at $68.24, the stock has seen a rise in bearish betting in its options pits of late. The equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.48 ranks in the 87th percentile of its 12-month range, indicating FB puts have been bought to open, relative to calls, at a faster-than-usual rate during the past two weeks. Right now, Schaeffer's Volatility Index (SVI) for Facebook Inc comes in at 37%, ranking in the bottom 22% of its annual range. In other words, the stock's short-term options are less expensive than usual, from a volatility perspective.

  • Option players have upped the bullish ante on F, despite the stock's six-month loss of 14.1% to trade at $15.48. Over the past 10 weeks, call buying (relative to put buying) has reached near-annual-high levels. This is evidenced by the equity's 50-day ISE/CBOE/PHLX call/put volume ratio of 4.08, which ranks 6 percentage points from a 52-week peak. Option players looking to place short-term bets can do so at a relative bargain right now, as Ford Motor Company's SVI of 20% sits lower than 84% of comparable readings from the past year.

  • With DRI's fiscal third-quarter earnings report right around the corner (ahead of the opening bell on Friday), option players are betting bearishly on the stock, which has shed nearly 10% year-to-date to trade at $49.88. The equity's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.62 ranks in the 80th annual percentile, highlighting the accelerated rate of call buying, relative to put buying, of late. Right now, prices on Darden Restaurants, Inc.'s short-term options are relatively average. The stock's SVI of 26% ranks in the 52nd percentile of its 12-month range.

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