Stocks quoted in this article:
The 20 stocks below have attracted the highest options volume -- in the front three-months' series -- during the past five 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 BlackBerry Ltd (NASDAQ:BBRY), Bank of America Corp (NYSE:BAC), and Micron Technology, Inc. (NASDAQ:MU).
BAC on Friday agreed to a settlement in a gender-discrimination lawsuit that had been brought against the financial firm. In today's session, the stock is trading modestly higher, prompting a number of speculators to target the May 2014 15-strike call, mostly on the ask side. Elsewhere, MU ran to a fresh six-year high of $15.69 this afternoon, thanks to some bullish brokerage attention. Not surprisingly, MU calls are outpacing puts by a margin of nearly 2-to-1. Meanwhile, here is a quick look at the interesting activity in BBRY's options pits.
BlackBerry Ltd (NASDAQ:BBRY) has been making a number of headlines of late, as the wireless communications issue contemplates being bought out. Today, the shares have soared 5.7% to $11.46, after reports surfaced that the company's top shareholder may be interested in offering up a bid. In the midst of all of this activity, BBRY's 30-day, at-the-money implied volatility (IV) is hovering near 86% -- a level not seen since late March. Against this backdrop, it appears that one speculator in today's session is following in the footsteps of Friday's spread strategist, hoping this elevated IV implodes in the near term.
Jumping right in... Shortly after the opening bell rang this morning, two symmetrical blocks of 4,950 contracts changed hands at the October 12 call and the October 10 put. The former went off below the bid price for $0.81, while the latter crossed at the bid price of $0.67. IV rose at each leg of the spread, suggesting that a short strangle was initiated for a net credit of $1.48. Ideally, BBRY will remain churning between $10 and $12 through the close on Oct. 18, allowing each option to expire worthless, and the speculator to retain the initial credit received as her full potential reward. However, she is still able to come out ahead, as long as the stock remains between $8.52 and $13.48 (put strike less the net credit; call strike plus the net credit) throughout the spread's lifetime. Risk, meanwhile, is theoretically unlimited to the upside, and capped at $8.52 to the downside.
Additionally, BlackBerry Ltd (NASDAQ:BBRY) is slated to step into the earnings confessional before the market opens on Friday, Sept. 27. Today's spread strategist could also be betting on a post-earnings volatility crush to help her exit the position with a profit.