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 Cliffs Natural Resources Inc (NYSE:CLF), Micron Technology, Inc. (NASDAQ:MU), and Halliburton Company (NYSE:HAL).
Before trading was halted on the Nasdaq earlier today, MU's long-term options were once again in focus, with one spread strategist targeting the stock's April 2014 14-strike puts. Spreads have also been popular on HAL, as the stock tagged a fresh two-year peak of $47.83. Specifically, a number of symmetrical blocks have changed hands at the September 55 call and put. Elsewhere, here is a quick look at the interesting activity in CLF's options pits.
Cliffs Natural Resources Inc (NYSE:CLF) is soaring today, as mining stocks get a lift from upbeat global manufacturing data. At last check, the equity was up 5.8% to linger near $22.44. As such, calls are outpacing puts by a roughly 2-to-1 margin. The most sought-after position on the day is the weekly 8/23 23-strike call, which has seen 3,953 contracts change hands for a volume-weighted average price (VWAP) of $0.25. The majority of these positions have crossed on the ask side, and volume is outstripping open interest, pointing to buy-to-open activity. By purchasing the calls, traders expect CLF to surpass the $23 mark by tomorrow's close. In order for speculators to turn a profit, though, CLF must muscle its way past breakeven at $23.25 (strike plus the VWAP). The options market doesn't seem as confident in this bullish outlook as today's call buyers are. Although delta for the option has risen to 0.27 from its perch at 0.074 at yesterday's close, this still only represents a 27% chance the call will find its way into the money throughout the course of its short lifetime. If CLF fails to conquer the strike price over the next one-plus sessions, the most the traders have risked is the initial premium paid.
Given that CLF is still staring at a steep 41.7% year-to-date deficit, there could be an alternative motive to today's call buying. Short interest rose more than 7% during the last two reporting periods, and now accounts for nearly 39% of the stock's available float. In other words, a portion of today's activity could simply represent shorts picking up hedges against their bearish bets.