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. One name of notable interest this afternoon is Citigroup Inc (NYSE:C).
Citigroup Inc is trading higher today, despite Wells Fargo booting the banking concern from its Priority Stock list this morning. In the stock's options pits, calls are crossing the tape at nearly two times the typical intraday levels, and outpacing puts by a margin of more than 2-to-1.
The most active position is the April 57.50 call, where 15,212 contracts have traded. More than half of these have changed hands on the ask side, and data from the International Securities Exchange (ISE) confirms buy-to-open activity. In other words, these aggressive speculators expect C -- currently lingering near $48.47 -- to rise 18.6% ahead of the close on Friday, April 18, which is when this options series expires.
However, the ISE also indicates that a number of these out-of-the-money calls were sold to open on the bid side, and Trade-Alert suggests some of the positions were tied to stock. Simply stated, it appears shareholders may be initiating covered calls to generate some additional income on their shares of C.
Elsewhere, eleventh-hour traders are targeting C's weekly 1/31 49-strike call, where the majority of the 7,861 contracts traded have done so on the ask side. Implied volatility is up, and volume outstrips open interest, making it safe to assume that new bullish positions are being initiated. Delta for the call is docked at 0.31, suggesting a 31% chance of an in-the-money finish. Should Citigroup Inc (NYSE:C) fail to topple the strike price by tomorrow's close, the most the call buyers stand to lose is the initial premium paid. According to Trade-Alert, the volume-weighted average price for the calls is $0.18.