Stocks quoted in this article:
Among the stocks attracting attention from options traders lately are global technology titan Google Inc (NASDAQ:GOOG), fertilizer concern Potash Corp./Saskatchewan (USA) (NYSE:POT), and video game maker Take-Two Interactive Software, Inc. (NASDAQ:TTWO). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on GOOG, POT, and TTWO.
- GOOG option players have bought to open calls over puts at a relatively modest pace during the past two weeks. In fact, the equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 1.23 ranks in the 52nd percentile of its annual range. Currently, short-term options on Google Inc are expensive, from a volatility perspective, as the stock's Schaeffer's Volatility Index (SVI) of 36% ranks in the 77th annual percentile. Meanwhile, on the charts, GOOG shares have lost 5.6% over the past month to trade at $1,135.10. Of note, GOOG's 2-for-1 stock split will go into effect tomorrow.
- POT -- which is up a modest 5.9% year-to-date to perch at $34.91 -- has seen heavier-than-usual bullish betting over bearish in its options pits of late, as evidenced by the stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 4.73, which ranks higher than 87% of comparable readings from the past year. Good news for those placing short-term bets -- SVI on Potash Corp./Saskatchewan (USA) comes in at 20%, and ranks 10 percentage points from a 12-month low. In other words, the equity's short-term contracts are attractively priced.
- TTWO's top-heavy 10-day ISE/CBOE/PHLX call/put volume ratio of 10.82 ranks in the 60th annual percentile, indicating calls bought to open have outnumbered puts at a slightly higher-than-usual rate recently. However, considering the shares are up 25.2% year-to-date to trade at $21.74, and 16.5% of the stock's float is sold short, it is likely some of this call activity is due to short sellers hedging their bearish bets against additional upside. Furthermore, now is an opportune time to pick up short-term Take-Two Interactive Software, Inc. options at a bargain, as the equity's SVI of 33% ranks lower than 90% of similar readings taken over the past year.