Schaeffer's Trading Floor Blog

Options Check-Up: Intel Corporation, Herbalife Ltd., and AK Steel Holding Corporation

Analyzing recent option activity for INTC, HLF, and AKS

by 4/21/2014 5:02 PM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are technology guru Intel Corporation (NASDAQ:INTC), nutritional supplements provider Herbalife Ltd. (NYSE:HLF), and steel producer AK Steel Holding Corporation (NYSE:AKS). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on INTC, HLF, and AKS .

  • While INTC has been exploring annual-high territory recently -- peaking at $27.24 last Wednesday, before settling at $26.95 at today's close -- the stock's options players have been upping the bearish ante. To be specific, Intel Corporation's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.16 ranks higher than 95% of comparable readings from the past year, demonstrating a near-extreme pace of put buying, relative to call buying, during the past two weeks. Furthermore, INTC's Schaeffer's Volatility Index (SVI) of 17% ranks just 7 percentage points from a 12-month low, indicating the equity's short-term options can be purchased at a bargain right now, from a volatility point of view.

  • HLF options traders have also been buying to open puts over calls at a near-annual-high rate recently, as the stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.55 ranks just 2 percentage points from a 12-month peak. Herbalife Ltd.'s short-term options aren't as attractively priced, however. The equity's SVI of 69% ranks in the 54th annual percentile, meaning these contracts are a tad more expensive than usual, relatively speaking. Meanwhile, on the charts, HLF shares are sitting 27.6% lower year-to-date to trade at $56.99.

  • Finally, AKS -- which is down about 18% year-to-date to trade at $6.71 -- has seen an accelerated amount of bullish activity (relative to bearish) in its options pits, ahead of the company's first-quarter earnings report tomorrow morning. To be specific, the equity sports a lofty 50-day ISE/CBOE/PHLX call/put volume ratio of 5.29, which ranks higher than 94% of similar readings taken during the past 12 months. Perhaps some of this heavy call activity has been the work of short sellers hedging against potential upside for the shares, considering short interest accounts for nearly one-third of the stock's float. Regardless of motive, those looking to pick up short-term options on AK Steel Holding Corporation right now can do so at a relative discount, as the stock's SVI of 59% ranks in the 39th percentile of its annual range.

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