Stocks quoted in this article:
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. Three names of notable interest this afternoon are Cisco Systems, Inc. (NASDAQ:CSCO), Yahoo! Inc. (NASDAQ:YHOO), and Apple Inc. (NASDAQ:AAPL).
Yahoo! Inc. is trading higher today, following an early morning upgrade. In YHOO's options pits, speculators are eyeing the weekly 11/1 34-strike call as they bet on a move above $34 by week's end. Elsewhere, Apple Inc. is lingering near $526.14 following last night's earnings report, prompting traders on both the long and the short sides to target the weekly 11/1 530-strike call. Finally, here's a closer look at where longer-term Cisco Systems, Inc. option players are pinning their bullish hopes.
Since hitting a three-year high of $26.49 in early August, Cisco Systems, Inc. has been consolidating atop its 50-week moving average. This pullback recently brought the stock south of its lower Bollinger Band, suggesting it had entered oversold territory. In today's session, the equity is 1.5% higher to trade at $22.87, prompting a flood of call activity to its options pits. At last check, around 180,000 calls had changed hands, or nearly six times the average intraday volume. Amid this increased demand for options, CSCO's 30-day, at-the-money implied volatility (IV) has moved up 1.3 percentage points, or 4.5%, to 30.7%.
The most sought-after option thus far is the January 2014 25-strike call, which has seen 58,466 contracts change hands -- including two large blocks totaling 29,770. The vast majority of these calls have traded at the ask price, IV is up 2.1 percentage points, and data from the International Securities Exchange (ISE) confirms that some of the day's activity is of the buy-to-open sort.
By initiating the long calls, traders expect CSCO to surmount the $25 mark over the next two-plus months. Considering Cisco Systems, Inc. (NASDAQ:CSCO) has not traded north of this level since mid-August, delta for the call is docked at 0.22, or 22%, suggesting a roughly 1-in-5 chance the position will finish in the money at expiration. Should the equity fail to jump the 9.3% necessary to topple the strike price, the most the traders stand to lose is the premium paid. According to Trade-Alert, the volume-weighted average price for the out-of-the-money calls is $0.25.