Schaeffer's Trading Floor Blog

Options Check-Up: Nokia Corporation (ADR), Sirius XM Holdings Inc., and DuPont

Analyzing recent option activity for NOK, SIRI, and DD

by 4/16/2014 5:05 PM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are telecom specialist Nokia Corporation (ADR) (NYSE:NOK), streaming music provider Sirius XM Holdings Inc. (NASDAQ:SIRI), and diversified science and tech concern E I Du Pont De Nemours and Co (NYSE:DD), otherwise known as DuPont. Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on NOK, SIRI, and DD

  • Although NOK is down about 10% year-to-date to trade at $7.30, the stock sports a 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 4.55, with calls bought to open more than quadrupling puts. What's more, this ratio ranks in the 66th annual percentile, indicating the recent rate of call buying, relative to put buying, is faster than usual. Meanwhile, good news for short-term option bettors -- Nokia Corporation's (ADR) Schaeffer's Volatility Index (SVI) of 48% ranks just 7 percentage points from a 12-month low, meaning prices on short-term contracts are nearing annual-low levels, from a volatility perspective.

  • SIRI -- which has shed more than 7% over the past month to trade at $3.17 -- has been popular with option bulls of late. In fact, the equity's top-heavy 10-day ISE/CBOE/PHLX call/put volume ratio of 9.04 ranks higher than 77% of comparable readings from the past year, signifying bullish bets have been placed over bearish at an accelerated rate during the past two weeks. However, it is possible that puts have been relatively unpopular due to the limited profit potential on a downside move. Whatever the case may be, Sirius XM Holdings Inc.'s short-term options are more expensive now than they have been all year, relatively speaking, as the stock's SVI of 44% ranks in the 100th annual percentile.

  • Finally, DD option players have bought to open puts, relative to calls, at a quicker-than-usual speed recently, with the equity's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.63 ranking in the 67th annual percentile. Short-term options on E I Du Pont De Nemours and Co remain at a relatively decent price, as evidenced by the fact that the equity's SVI of 19% ranks in the 46th percentile of its 12-month range. Meanwhile, on the charts, DD shares are positioned about 36% higher on a year-over-year basis to trade at $67.72. Looking ahead, the company's first-quarter earnings report will hit the Street tomorrow morning.

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