Schaeffer's Trading Floor Blog

Options Check-Up: Tesla Motors Inc, Baidu Inc (ADR), and Bed Bath & Beyond Inc.

Analyzing recent option activity for TSLA, BIDU, and BBBY

by 4/7/2014 4:46 PM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are electric car manufacturer Tesla Motors Inc (NASDAQ:TSLA), China-based search engine Baidu Inc (ADR) (NASDAQ:BIDU), and home furnishings retailer Bed Bath & Beyond Inc. (NASDAQ:BBBY). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on TSLA, BIDU, and BBBY.

  • TSLA shed another 2.2% today to close at $207.52, marking the third consecutive daily loss, following the company's appeal on a New Jersey ban on direct vehicle sales. Meanwhile, during the past two weeks, speculators at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have upped the bearish ante on Tesla Motors Inc. On these exchanges, the equity has racked up a 10-day call/put volume ratio of 0.95, which ranks in the 69th annual percentile, pointing to a recent acceleration of bearish betting, compared to bullish. Short-term TSLA option buyers can rest assured they are getting the best bang for their buck, as the stock's Schaeffer's Volatility Index (SVI) of 52% ranks lower than 83% of comparable readings from the past year, indicating short-term contracts are attractively priced right now, from a volatility perspective.

  • On the other hand, BIDU speculators have bought to open calls over puts recently, as evidenced by the equity's 10-day ISE/CBOE/PHLX call/put volume ratio of 2.34, which ranks in the 73rd annual percentile. Relatively speaking, short-term options on Baidu Inc (ADR) -- which is down 21.2% over a one-month period to trade at $143.51 -- are slightly more affordable than usual. In fact, the stock's SVI of 43% ranks in the 41st percentile of its 12-month range.

  • Finally, BBBY's 10-day put/call volume ratio of 0.93 ranks in the 60th annual percentile, meaning option traders have been stacking up on long puts, relative to long calls, ahead of the company's fourth-quarter earnings report Wednesday evening. With this quarterly event only days away, the equity's SVI of 35% ranks in the 59th percentile of its 12-month range, showing short-term options on Bed Bath & Beyond Inc. are slightly more expensive than usual right now. Meanwhile, on the charts, BBBY shares are down 16.1% so far this year to trade at $67.37.

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