Stocks quoted in this article:
The 20 stocks listed below are the members of the S&P MidCap 400 Index (MID) that have seen the highest total options volume (calls and puts combined) 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 equity attracting unusual volume ahead of its quarterly earnings report is Apollo Education Group Inc (NASDAQ:APOL).
For the second consecutive session, Apollo Education Group Inc has captured the attention of options players, with tonight's fiscal second-quarter earnings report due in a matter of hours. Call volume is currently running at a pace that is quintuple what's typically seen on an intraday basis, while put trading is four times heavier than usual.
Most active on the put side of the fence is the April 32 strike. Volume of more than 1,400 contracts exceeds open interest, nearly two-thirds of the trades have crossed at the ask price, and implied volatility is moving higher, all suggestive of newly opened long positions. These puts represent a bet that APOL will tumble south of $32 over the next couple of weeks before April options expire.
Getting the most attention on the call side, meanwhile (with more than 1,000 contracts on the tape) is the 4/4 35-strike option, which will expire at the close of Friday's trading. Similarly, volume outpaces open interest, the lion's share of the action traded at the ask price, and implied volatility is on the upswing. In other words, speculators are scooping up long calls in the hope that Apollo shares enjoy a post-earnings pop.
This would be a safe bet, assuming past is prologue. Apollo Education Group Inc (NASDAQ:APOL) has exceeded analysts' earnings estimates in each of the past seven quarters, and the response has been positive. In fact, the stock has mustered an average gain of 2.8% and 4.4% in the respective day and week following these earnings results. The company reports after the close tonight, and analysts are targeting a per-share profit of 19 cents for the for-profit education provider. This marks a 3-cent improvement over year-ago results.