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 AT&T Inc. (NYSE:T), Facebook Inc (NASDAQ:FB), and Halliburton Company (NYSE:HAL).
Facebook Inc investors are once again focused on the short term, and call volume is running at a 30% mark-up to what is seen on a typical trading day. Attracting notable attention is the weekly 8/30 41-strike call, where today's volume of more than 13,000 contracts trumps existing open interest, even though the position will expire at tomorrow's close. The volume is likely a relatively even mixture of buying and selling. Meanwhile, Halliburton Company has attracted a ratio put spread trader, who is active in the January 2014 series. HAL shares go ex-dividend tomorrow. Finally, here is a quick look at today's action in the AT&T Inc. option pits.
Newly returned to the most active options update list, AT&T has been targeted by put players today. With roughly 17,000 contracts on the tape, put volume is currently outpacing typical intraday levels by about 72%. Within the first hour of today's trading, nearly symmetrical blocks (numbering 6,055 and 6,000 contracts, respectively) traded at the September 33 put and the weekly 8/30 33.50-strike put. Given the looming expiration of the higher-strike position -- and the fact that today's volume at the September strike exceeds open interest -- it is possible that open long puts are being rolled out (and down) to a later and lower strike.
In essence, the put trader may be extending his bearish bet on T by selling to close the soon-to-expire puts (below the bid price at $0.10 each) and then buying to open another block of puts for the ask price of $0.32. If the trader has a bearish outlook, this move allows three more weeks for a decline to play out. If the long puts are protective in nature, it gives the AT&T shareholder some peace of mind through Sept. 20.
T shares have gained 1.3% today to $34.01, but have lost 3.6% in August. If shareholders are concerned about more downside -- but still want to hold their stock position for the duration -- they may have opted to scoop up out-of-the-money puts to help offset any impending losses. If these are simply long put buyers anticipating additional declines, they have their eyes on the breakeven price of $32.68, or the September strike price less the premium paid. This is just a chip shot south of AT&T's annual low of $32.71, reached in mid-November.