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The 20 stocks listed in the table below 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 AT&T Inc. (NYSE:T), as call volume on the telecom stock ramped up last Friday.
Roughly 42,000 calls changed hands on AT&T Inc. during the course of Friday's session, representing 1.44 times the stock's average daily call volume. Traders were torn between short-term and long-term bets on T, as the two most active strikes were the August 35 call and the January 2016 35-strike call.
While 7,039 contracts changed hands at the front-month strike, a total of 8,260 calls were exchanged on the January option. The majority of the volume at both strikes crossed the tape on the ask side, suggesting buyers were driving the action, and open interest jumped over the weekend -- by 4,082 contracts for the August 35 call, and by 8,145 contracts for the January 2016 35-strike call. Based on this evidence, it looks like speculative players were buying to open new bullish bets on T last Friday.
By purchasing 35-strike calls on T, traders are banking on the blue-chip stock to rally above this level prior to options expiration. Since the long-term traders bought quite a bit more time for their bullish view to play out, they paid a steeper premium for their options. The volume-weighted average price (VWAP) on the August 35 call -- which expires at the end of this week -- was $0.10, while the VWAP on its January 2016 counterpart was $1.97.
Friday's influx of call buying was a deviation from the norm for T, which has been heavily targeted by put players of late. During the past 10 days, traders have bought to open 2.21 puts for every call on the security, according to data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio arrives in the 88th annual percentile, as options players on these three exchanges have shown a stronger preference for puts over calls just 12% of the time in the last year.
On the charts, AT&T Inc. (NYSE:T) is fractionally higher today at $34.50. The stock has gained 8.7% from February's annual low of $31.74.