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 among short-term traders this afternoon is Facebook Inc (NASDAQ:FB). Falling off the list since last time were Citigroup Inc (NYSE:C) and Pfizer Inc. (NYSE:PFE).
Calls are the options of choice on Facebook Inc this afternoon. By the numbers, around 85,000 calls have changed hands so far, compared to about 57,000 puts. On the charts, the equity is facing some broad-market headwinds from the Nasdaq Composite, but is maintaining its newfound perch atop the $62.50 mark, last seen lingering near $62.80. As such, a number of call players in today's session are targeting the June 62.50 strike, hoping this area once again serves as a springboard for FB -- like it did in early February.
More than 10,600 contracts have changed hands at this strike today -- the majority at the ask price, suggesting they were bought. Meanwhile, implied volatility has edged higher, hinting at the initiation of new positions. Data from the International Securities Exchange (ISE) confirms that at least some of the day's activity is of the buy-to-open kind.
Based on Facebook's present price, the June 62.50 calls are in the money. In order for the call buyers to profit, though, FB must be sitting north of $64.63 (strike plus the volume-weighted average price of $2.13) at the close on Friday, June 20 -- when the options expire -- above which gains are theoretically unlimited. Should the stock take a turn for the worse, and settle south of the strike price at expiration, the most the speculators stand to lose is 100% of the premium paid.
According to FB's Schaeffer's Volatility Index (SVI) of 33% -- which ranks in the 14th percentile of its annual range -- premium on the stock's front-month options is relatively inexpensive at the moment, though. What's more, the equity's Schaeffer's Volatility Scorecard (SVS) is perched at 100 -- the highest possible reading -- meaning Facebook Inc (NASDAQ:FB) tends to make outsized moves, relative to what the options market has priced in.