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Most Active Options Update: Advanced Micro Devices, Inc. (AMD)

Put option buyers bet against the rebound in Advanced Micro Devices, Inc.

by 8/20/2014 1:52 PM
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The 20 stocks listed in the table below are the S&P 400 MidCap Index (MID) components that have attracted the highest total options volume during the past 10 trading days. Names highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. One name of notable interest is Advanced Micro Devices, Inc. (NYSE:AMD), which has been heavily targeted by put buyers in recent sessions.

Most Active Options Table

Over the past 10 trading days, speculative players have bought to open 16,640 calls and 16,112 puts on Advanced Micro Devices, Inc., according to data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The resulting 10-day put/call volume ratio of 0.97 registers in the 88th percentile of its annual range, suggesting options players have shown a stronger-than-usual preference for bearish bets over bullish lately.

This is confirmed by AMD's Schaeffer's put/call open interest ratio (SOIR) of 1.09, with puts outnumbering calls among options set to expire within three months. This ratio ranks higher than 84% of other such readings taken over the past year, as short-term options players have been more put-heavy just 16% of the time.

In the front-month series, the site of peak put open interest is the September 4.50 strike, with 22,491 contracts outstanding. Based on data from the ISE, CBOE, and PHLX, at least half of this open interest was buyer-initiated.

AMD last traded above $4.50 on July 17, just prior to its poorly received second-quarter earnings report. Since the stock's post-earnings low of $3.67, AMD has rallied 15.8% to trade at $4.25. However, $4.50 has acted as resistance on multiple occasions over the last year, and put buyers at this strike are apparently betting on that trend to continue.

Meanwhile, it's not just options traders who are betting against the Advanced Micro Devices, Inc. (NYSE:AMD) rebound. Short interest on the tech stock rose by 36% during the most recent reporting period, and now represents 24.7% of AMD's float.


Best Buy Co Inc (BBY) Bulls Roll the Dice On a Post-Earnings Pop

Best Buy Co Inc will report earnings ahead of next Tuesday's open

by 8/20/2014 1:43 PM
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Best Buy Co Inc (NYSE:BBY) calls are trading at three times what's typically seen at this point in the day, and are outpacing puts by a more than 3-to-1 margin. Meanwhile, the stock's 30-day at-the-money implied volatility (IV) is up 2.1% to $45.9% -- in the 86th annual percentile -- highlighting increased demand for short-term options. Diving deeper reveals a number of speculators are betting on the stock to enjoy another post-earnings move to the upside when the company unveils its quarterly report ahead of next Tuesday's open.

Specifically, the weekly 8/29 31-strike call is the most active BBY option today, with 12,525 contracts on the tape at last check. Almost all of these changed hands at the ask price, IV is up 7.1 percentage points, and only 120 contracts currently make up open interest here. Summing it all up, it seems safe to assume a fresh batch of bullish bets is being initiated.

With BBY lingering near $31.06, these calls are right at the money. However, in order for today's call buyers to profit, the stock must settle above breakeven at $32.40 (strike plus the volume-weighted average price of $1.40) at next Friday's close, when the weekly series expires. Gains will accrue north of here, while losses are limited to the initial cash outlay, should BBY finish south of the strike at expiration.

Following its turn in the earnings confessional last August, shares of BBY rallied 13.2% in the subsequent session -- a gain that widened to 16.5% when going out one week. For Best Buy Co Inc's (NYSE:BBY) fiscal second quarter, Wall Street is calling for a profit of 31 cents per share -- one penny less than what the company earned last year.


Options Radar: BlackBerry Ltd, Hertz Global Holdings, and SodaStream

Reviewing notable options activity on BlackBerry Ltd, Hertz Global Holdings, Inc., and SodaStream International Ltd

by 8/20/2014 12:40 PM
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Option traders have taken a shine to smartphone maker BlackBerry Ltd (NASDAQ:BBRY), car rental firm Hertz Global Holdings, Inc. (NYSE:HTZ), and at-home beverage issue SodaStream International Ltd (NASDAQ:SODA). Here's a look at how speculators have been placing their bets on BBRY, HTZ, and SODA today.

  • BlackBerry Ltd (NASDAQ:BBRY) is trading 3.3% higher at $10.18, as anticipation builds for the company's anticipated Passport launch next month. Intraday call volume is running at a 60% mark-up to the norm, and has nearly quadrupled BBRY put volume thus far. Short-term options are growing increasingly popular, as the stock's 30-day at-the-money (ATM) implied volatility (IV) has jumped 4.9% to 42.5%. Digging deeper, it appears short-term bulls are buying to open the weekly 8/22 10- and 10.50-strike calls, amid expectations for more upside this week. Slightly longer-term bulls, meanwhile, are purchasing to open September 10 and 11 calls, on hopes that BBRY will extend its journey higher through the close on Friday, Sept. 19, when front-month options expire.

  • Hertz Global Holdings, Inc. (NYSE:HTZ) has surrendered 9.3% to trade at $28.63 -- and landed on the short-sale restricted list -- after the firm withdrew its full-year financial guidance. Bears are taking to the options pits instead, with intraday put volume running at 32 times the average rate. It looks like one trader is gambling on a lengthier slide for HTZ, initiating a put ratio spread in the January 2015 series. Specifically, the speculator bought to open 3,100 January 2015 28-strike puts, and then lowered his cost of entry by selling to open twice as many January 2015 24-strike puts. In the best-case scenario, HTZ will settle right at $24 when January 2015 options expire, and the trader can collect $3 per spread (difference between strikes minus net debit of $1). Should HTZ remain atop $28, the strategist will forfeit the initial net debit, while losses will add up on a move south of $24, as half of the sold puts are "naked."

  • Finally, SodaStream International Ltd (NASDAQ:SODA) is up 4.7% at $34.29, with speculators on StockTwits chatting up rumors of a buyout or a partnership with PepsiCo, Inc. (NYSE:PEP). Whatever the motive, SODA's short-term options are hot, as the stock's 30-day ATM IV has popped 9.1% to 41.9%. Calls are the options of choice, with roughly 5,000 contracts exchanged, compared to fewer than 650 puts. Digging deeper, it looks like bulls are circling the weekly 8/22 34-strike call, where volume has surpassed open interest and IV has jumped 3.6 percentage points. More ambitious bulls, meanwhile, are apparently buying to open the September 35 call, amid expectations for SODA to topple the strike within the next few weeks.


Shutterfly, Inc. (SFLY) Call Volume Pops Amid Buyout Buzz

Shutterfly, Inc. call volume is trading at 20 times the average intraday pace

by 8/20/2014 11:18 AM
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Rumors began circulating in early July that Shutterfly, Inc. (NASDAQ:SFLY) was putting itself up for sale, and today, reports are surfacing that a number of private equity firms are coming forth as potential suitors for the photo printing concern. Against this backdrop, shares of SFLY are up 2.4% this morning, and call volume has soared to more than 20 times the average intraday rate.

Most active is SFLY's September 55 call, where 1,502 contracts have changed hands at a volume-weighted average price (VWAP) of $0.97. The majority of these have crossed at the ask price, and volume outstrips open interest, pointing to the purchase of new positions. Based on the average entry price, today's call buyers will profit if SFLY is sitting north of breakeven at $55.97 (strike plus VWAP) at the close on Friday, Sept. 19, when front-month options expire.

From a wider sentiment perspective, today's accelerated call activity only highlights the withstanding trend seen in SFLY's options pits. Specifically, the stock's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 6.64 ranks in the 69th percentile of its annual range. Simply stated, calls have been bought to open over puts at a faster-than-usual clip in recent months.

With more than 14% of Shutterfly, Inc.'s (NASDAQ:SFLY) float sold short, though, a portion of this activity could be a result of shorts protecting their bearish bets against an unexpected surge. At last check, SFLY was trading at $51.03, and had edged slightly into the green on a year-to-date basis.


Apple Inc. (AAPL) Option Players Eye Higher Highs

Apple Inc. option speculators expect more upside this week

by 8/20/2014 10:35 AM
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Apple Inc. (NASDAQ:AAPL) calls are trading at more than twice the rate of puts this morning, with speculators gambling on the tech titan's end-of-week trajectory. In light of the stock's newly tagged post-split high of $100.77, hit out of the gate this morning, traders have taken a shine to the weekly 8/22 100- and 101-strike calls.

Implied volatility (IV) on the 100-strike call has jumped 2.3 percentage points, reflecting the growing demand for century-mark contracts. Digging deeper, the option has seen a mix of buyer- and seller-driven volume, with the latter likely due to traders taking profits in the wake of AAPL's new high.

Those buying the calls to open have done so at a volume-weighted average price (VWAP) of $0.81, which represents their maximum risk, should AAPL finish the week in double-digit territory. Friday's at-expiration breakeven, meanwhile, stands at $100.81 (strike plus VWAP) -- in uncharted territory for the shares -- with profit theoretically unlimited north of here. Delta on the call stands at 0.53, implying a roughly 1-in-2 chance of finishing in the money at Friday's close, when the weekly options expire.

IV on the 101-strike call was last seen 1.4 percentage points higher, and buyers have initiated positions at a VWAP of $0.34. As such, they'll make money if AAPL is sitting above $101.34 -- pointing to expectations for even higher highs -- at Friday's close. Risk is limited to the initial premium paid for the calls, should AAPL fail to topple $101 by week's end. Delta on the call rests at 0.26, suggesting a slightly greater than 1-in-4 shot of expiring in the money.

After touching the aforementioned peak of $100.77 in early trading, the shares of Apple Inc. (NASDAQ:AAPL) have turned tail amid reports of an iWatch delay, giving up 0.4% to wink at the $100.09 level. Today's appetite for bullish bets is nothing new, though, as the stock's 10-day call/put volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits at 2.55 -- higher than 86% of all other readings from the past year. In other words, option buyers have scooped up AAPL calls over puts at a much faster-than-usual clip during the past two weeks.


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