Schaeffer's Trading Floor Blog

Options Check-Up: Tesla Motors Inc, Twitter Inc, and Tibco Software Inc.

Analyzing recent option activity for TSLA, TWTR, and TIBX

by 6/19/2014 7:14 AM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are electric car pioneer Tesla Motors Inc (NASDAQ:TSLA), microblogging platform Twitter Inc (NYSE:TWTR), and software provider Tibco Software Inc. (NASDAQ:TIBX). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on TSLA, TWTR, and TIBX.

  • TSLA has climbed more than 50% this year to perch at $227.12, so it comes as no surprise option traders have been particularly bullish toward the equity in recent sessions. The stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 1.85 stands 5 percentage points from a 12-month peak, demonstrating TSLA calls have been bought to open over puts at a near-annual-high clip during the past two weeks. It should be noted, however, that short interest accounts for 27.9% of Tesla Motors Inc's available float, so some of the recent long call activity may be attributed to short sellers hedging against more upside. Whatever their motive, speculators can purchase short-term TSLA options inexpensively right now (from a volatility perspective), as the stock's Schaeffer's Volatility Index (SVI) of 42% ranks in the bottom 10% of its annual range.

  • Although TWTR has shed more than 39% year-to-date to trade at $38.74, three times as many calls as puts have been bought to open in the stock's options pits during the last two weeks, resulting in a 10-day ISE/CBOE/PHLX call/put volume ratio of 3.13. With that being said, a continuation of Twitter Inc's downward trajectory may cause an unwinding of bullish bets, which could translate into additional headwinds on the charts. Luckily for short-term option buyers, the equity's SVI of 42% ranks lower than 88% of comparable readings from the past year, indicating short-term contracts are cheaper than usual right now.

  • Leading up to tomorrow night's fiscal second-quarter earnings report, TIBX has racked up a top-heavy 50-day ISE/CBOE/PHLX call/put volume ratio of 9.95. What's more, this ratio ranks in the 82nd annual percentile, demonstrating the recent rate of call buying, relative to put buying, is faster than usual. Those looking to purchase short-term options can still do so at an inexpensive price, relatively speaking, as Tibco Software, Inc.'s SVI of 39% ranks in the 30th percentile of its 12-month range. Meanwhile, on the charts, the shares are staring at a year-to-date deficit of more than 6% to linger near $21.08.

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