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Option Trends: General Motors,, and Qualcomm

Calls are a popular choice on GM and QCOM, while PCLN speculators prefer puts

by 9/20/2012 12:00:24 PM
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Speculative players are placing their bets on automaker General Motors Company (NYSE:GM - 24.44), discount travel site Incorporated (NASDAQ:PCLN - 633.07), and tech stock Qualcomm, Inc. (NASDAQ:QCOM - 64.49), according to volume data from the major options exchanges. In recent sessions, both GM and QCOM have been targeted by call buyers, while put activity has ramped up on PCLN. Here's a closer look at the latest trends in the options pits for these three hot stocks.

On Wednesday, GM option players bought to open 5,706 calls on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), compared to just 1,659 puts. The resulting call/put volume ratio of 3.44 confirms that bullish bets were the options of choice on the auto stock.

GM daily price chartIn fact, GM now sports a 10-day ISE/CBOE/PHLX call/put volume ratio of 3.57, which arrives in the 81st percentile of its annual range. This elevated reading reveals a stronger-than-usual skew toward calls over puts.

On a year-to-date basis, GM has gained a respectable 22.1%. Since early August, the shares have been trekking higher along the newfound support of their 10-day and 20-day moving averages.

On the other hand, traders on the ISE, CBOE, and PHLX bought to open 2,159 PCLN puts yesterday, along with 1,747 calls. The stock's 10-day put/call volume ratio across all three exchanges now stands at 1.48, in the 97th annual percentile -- within striking distance of a pessimistic peak.

The shares have gained a solid 36.6% so far in 2012, and PCLN is still holding steady above long-term support at its 10-month and 20-month moving averages. However, the security has been stifled by resistance at its 20-week moving average since the start of June. This trendline is currently docked at $639.18, not too far above the stock's current perch.

Meanwhile, traders bought to open 1,807 QCOM calls on Wednesday, easily outstripping the 451 puts that were purchased. Likewise, the stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 3.02 -- in the 71st annual percentile -- points to a healthier-than-average preference for bullish bets over bearish in recent weeks.

QCOM is off 0.9% at last check, despite a price-target hike to $75 from $72 at RBC. The stock is up roughly 19% in 2012, but it's now trading just below the troublesome $65 level.

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