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

Among the stocks attracting attention from options traders lately are telecom services providers Nokia Corporation (ADR) (NYSE:NOK) and AT&T Inc. (NYSE:T), plus alternative energy concern Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on NOK, T, and YGE.

  • While NOK has been battling with a firm layer of resistance near the $8 mark for about seven months now, recent option traders have been bullish toward the equity. In fact, the stock sports a 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 4.26, with long calls more than quadrupling puts during the last 10 weeks. What's more, this ratio ranks in the 82nd annual percentile, showing the recent rate of bullish betting (compared to bearish) is faster than usual. The good news about purchasing short-term bets on Nokia Corporation (ADR) -- perched at $8.05 -- right now is the equity's Schaeffer's Volatility Index (SVI) of 42% ranks 6 percentage points from a 12-month low. In other words, front-month NOK options have rarely been as cheap as they are now, from a historical perspective. Separately, NOK will host its annual shareholder meeting next Tuesday, June 17.

  • On the other hand, T -- which is up nearly 10% from its early February year-to-date low of $31.74 to trade at $34.81 -- has seen a near-annual-high rate of put buying, relative to call buying, in its options pits of late. This is evidenced by the equity's 10-day ISE/CBOE/PHLX put/call volume ratio of 3.60, which ranks just 4 percentage points from a 12-month peak. Now appears to be a good time to purchase options on AT&T Inc., too, considering the stock's Schaeffer's Volatility Scorecard (SVS) of 62 suggests the shares tend to make outsized moves, relative to what the options market has priced in.

  • While YGE is on its way to the earnings confessional next Tuesday morning, June 17, speculators have bought to open more than 61 calls for every put during the past two weeks. The resulting 10-day ISE/CBOE/PHLX call/put volume ratio of 61.20 ranks in the top 10% of its 12-month range, indicating the demand for long calls over puts is at a near-extreme level. Meanwhile, premium on Yingli Green Energy Hold. Co. Ltd.'s (ADR) front-month options has remained relatively low ahead of the quarterly event, with the stock's SVI of 104% ranking lower than 76% of comparable readings from the last year. On the charts, YGE is down 42.4% so far this year to trade at $2.91.

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