Schaeffer's Trading Floor Blog

Options Check-Up: Intel Corporation, Starbucks Corporation, and AT&T Inc.

Analyzing recent option activity for INTC, SBUX, and T

by 3/24/2014 5:19 PM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are semiconductor heavyweight Intel Corporation (NASDAQ:INTC), global coffee retailer Starbucks Corporation (NASDAQ:SBUX), and telecom services provider AT&T Inc. (NYSE:T). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on INTC, SBUX, and T.

  • Option players have been betting on more gains from INTC, which is up 6.9% from its Feb. 5 intraday low of $23.50 to trade at $25.12. During the past 10 trading days, the equity has racked up an International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.92, which ranks in the 82nd annual percentile. Right now, prices on short-term Intel Corporation options are lower than usual, from a volatility perspective. In fact, the stock's Schaeffer's Volatility Index (SVI) of 21% ranks in the bottom 23% of its 12-month range.

  • On an absolute basis, SBUX's 10-day ISE/CBOE/PHLX call/put volume ratio of 1.58 appears bullishly skewed, with long calls easily outnumbering long puts. However, this ratio ranks in the 45th annual percentile, demonstrating the recent pace of call buying, relative to put buying, is slightly slower than usual. Nevertheless, now is an opportune time to purchase short-term SBUX contracts (on both sides of the aisle) at a relative bargain, as the stock's SVI of 19% ranks lower than 84% of comparable readings from the past 12 months. Of note, Starbucks Corporation shares have tacked on 10.3% to trade at $75.77 since bottoming (on a year-over-year basis) at $68.67 on Feb. 3.

  • T option traders have been placing bearish bets, relative to their bullish counterparts, at an accelerated rate during the past two weeks, as evidenced by the stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.75, which ranks in the 63rd annual percentile. This makes sense, considering the equity has been a technical laggard for the past 12 months, losing more than 5% to trade at $34.46. Plus, prices on short-term AT&T Inc. options are leaning toward the affordable side, relatively speaking. The equity's SVI of 15% ranks in the 40th percentile of its 12-month range.

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