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

Among the stocks attracting attention from options traders lately are automaker Ford Motor Company (NYSE:F), satellite music provider Sirius XM Holdings Inc. (NASDAQ:SIRI), and carbonated beverage concern SodaStream International Ltd (NASDAQ:SODA). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on F, SIRI, and SODA.

  • F -- which is down more than 4.3% from its April 4 intraday high of $16.49 to trade at $15.77 -- has seen an an uptick in put activity since its disappointing trip to the earnings confessional on April 25. To be specific, the equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.30 ranks in the 67th annual percentile. So, while long F calls have technically outnumbered puts during the past two weeks, the latter have been picked up at a faster-than-usual clip. Luckily for those betting on Ford Motor Company's short-term trajectory, the stock's Schaeffer's Volatility Index (SVI) of 18% ranks in the bottom 10% of its 12-month range. In other words, front-month contracts are cheaper than usual, from a volatility perspective.

  • Meanwhile, long calls on SIRI have outnumbered puts by a nearly 6-to-1 margin during the past 10 trading days, resulting in an ISE/CBOE/PHLX call/put volume ratio of 5.96. While this ratio appears bullishly skewed, on an absolute basis, it demonstrates a relatively average rate of trading in the equity's options pits. With Sirius XM Holdings Inc. is down 9.5% year-to-date to trade at $3.16, long puts may be a less popular choice among speculators due to the limited profit potential on the trades. Nevertheless, those purchasing short-term contracts are doing so at a high price, relatively speaking, as the stock's SVI of 42% ranks higher than 82% of comparable readings from the past year.

  • SODA is on its way to the earnings confessional this Wednesday morning, and ahead of the quarterly event, speculators have been buying to open calls over puts at an accelerated rate. This is evidenced by the stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 2.10, which ranks in the 76th percentile of its annual range. Short-term option buyers are willing to pay a pretty penny for their plays on SodaStream International Ltd -- which is down 16.2% year-to-date to trade at $41.60 -- as the equity's SVI of 81% ranks just 3 percentage points from a 12-month high. Of note, some of the recent call traders may actually be short sellers in disguise, hedging against a potential earnings-induced pop. Currently, short interest on SODA represents nearly 37% of the equity's available float.

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