Stocks quoted in this article:
The 20 stocks below have attracted the highest options volume -- in the front three-months' series -- during the past 10 trading days. The companies highlighted are those that are new to the list since the last time the study was run. Data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. Three names of notable interest this afternoon are American International Group Inc (NYSE:AIG), Potash Corp./Saskatchewan (USA) (NYSE:POT), and Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR).
POT has shed 1.7% today, after the fertilizer sector got hit with a round of downgrades at HSBC this morning. As such, traders are targeting the October 29 put, as they bet on additional downside over the next two months. Elsewhere, GMCR rallied to a fresh 52-week peak of $84.41 right out of the gate, but option players simply refuse to capitulate to the stock's upward momentum. In addition to put volume running at a 70% mark-up to its average intraday pace, roughly 1.6 puts have been traded for each call. Meanwhile, here is a quick look at the interesting activity in AIG's options pits.
American International Group Inc (NYSE:AIG) has been steadily making its way higher in 2013, with the stock tacking on nearly 34% year-to-date. Assisting the equity with this upward momentum has been its 20-week moving average, which has not only pushed the stock northward since early December, but also contained its most recent pullbacks. This bout of positive price action prompted one speculator in today's session to use calls and puts to create some options-related insurance. Earlier in the session, two symmetrical blocks of 3,900 October 50 calls and October 42 puts changed hands at the bid price of $0.62 and above the ask price for $0.47, respectively. Trade-Alert has marked the call as "opening," and implied volatility is higher at each strike, suggesting a collar was initiated for a net credit of $0.15 per pair of contracts. By simultaneously purchasing the protective put and selling the covered call, the speculator has created a cheap two-pronged hedge against any significant downside AIG may see over the next two months (the stock is currently trading at $47.21). On the flip side, she has also limited any upside gains, should AIG muscle past $50 ahead of the close on Oct. 18, which would move the sold calls into the money (and raise the chance the stock will be called away).
In today's session, AIG is outperforming the broad market, and was last seen 0.6% higher. Meanwhile, Reuters reported last night that New China Trust cancelled its $4.8 billion bid for AIG's aircraft-leasing unit in May.