Traders Liquidate Calls on Lockheed Martin (LMT)

Lockheed Martin (LMT) was the center of some heavy options trading on Wednesday, as traders flocked to the stock's calls. More than 27,300 contracts changed hands, which is more than five times the equity's average daily trading volume, according to data from WhatsTrading.com. In addition, roughly 95% of the volume changed hands on the call side.

In the front three months of options, we find that the December 70 call shed 2,200 contracts, reducing its open interest to 33 contracts. Meanwhile, the January 70 call reduced its open interest by 900 contracts to 73 contracts.

As a result of this call liquidation, the stock's Schaeffer's put/call open interest ratio jumped from 1.12 to 1.27. This ratio is now higher than 81% of all those taken during the past 12 months. In other words, short-term options players have been more skeptical of the shares only 19% of the time during the past 52 weeks.

In fact, the International Securities Exchange (ISE) has seen an increase in put trading. During the past 10 trading sessions, 1.7 puts have been purchased to open for every one call purchased to open. This ratio of puts to calls is higher than 74% of all those taken during the past year.

Furthermore, the ISE/Chicago Board Options Exchange (CBOE) 10-day put/call volume ratio comes in at 1.79, which is higher than 81% of all those taken during the past 12 months, pointing to a growing skepticism toward the shares.

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