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Google Inc (NASDAQ:GOOG) has hit a technical speed bump recently, with the shares shedding around 3.7% during the past month. In spite of this, option players are choosing to take the bullish route on the stock. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open 69,424 calls on GOOG throughout the last two weeks (ended Aug. 23), compared to 49,788 puts. What's more, the resultant 10-day call/put volume ratio of 1.39 (up from its Aug. 1 reading of 1.19) ranks in the 88th percentile of its annual range, meaning long calls have been initiated over long puts with more rapidity just 12% of the time within the past year.
Echoing this call-skewed trend is the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.88, which ranks in the 28th percentile of its annual range. In simpler terms, GOOG speculators are more call-heavy than usual among options expiring in three months or less.
In the front-month series, this trend has translated into peak call open interest at the September 900 strike, where 5,556 contracts reside -- the majority of which have been bought to open. In order for GOOG to topple this overhead strike price -- a feat not accomplished on an intraday basis since Aug. 6 -- the stock must rise 5.7% above its current perch at $851.77.
Against this acceleration in call activity, GOOG's 30-day, at-the-money implied volatility has jumped 4 percentage points since Aug. 17 to 21.3% -- nearing its highest perch since GOOG reported earnings on July 18.
This recent bout of downbeat price action notwithstanding, Google Inc (NASDAQ:GOOG) has performed quite well on the charts. In fact, on a year-to-date basis, the equity has added a formidable 20.6%. After hitting a record peak of $928 in mid-July, the equity entered this current state of consolidation, but seems to have found a foothold atop its 140-day moving average. This trendline served as support for GOOG during a previous pullback attempt in November 2012.