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 Ford Motor Company (NYSE:F), Bank of America Corp (NYSE:BAC), and Cisco Systems, Inc. (NASDAQ:CSCO).
Bank of America Corp call volume has soared to more than two times its intraday norm today, following the banking concern's early morning quarterly results. Meanwhile, Cisco Systems, Inc. is trading lower, on the heels of a negative brokerage note. In CSCO's options pits, speculators appear to be closing out of their January 2014 20-strike calls. Elsewhere, here's a closer look at where Ford Motor Company traders are forecasting a post-earnings move for the stock.
Ford Motor Company is having a good day, with the shares up 1.6% following this morning's upgrade. Also adding to the bullish buzz is a report from across the pond that showed car registrations in the European Union jumped in September, following a drop in the previous month. The positive price action has call players flocking to F's options pits, with the contracts trading at a 45% mark-up to the average intraday volume (and outpacing puts by a margin of more than 5-to-1). The most active strike on the day is the weekly 11/1 17.50-strike call, which has seen 11,073 contracts -- including several mid-sized blocks -- change hands for a volume-weighted average price (VWAP) of $0.26. Nearly all of these calls have gone off on the ask side, and volume is outstripping open interest, suggesting that a fresh batch of bullish bets is being initiated.
By purchasing the calls, traders expect Ford to find its way north of $17.50 over the next two-plus weeks -- a time frame that encompasses both the company's quarterly earnings report and its monthly sales data for October. More specifically, the speculators will begin to profit with each step above $17.76 (strike plus the VWAP) the stock takes through the Nov. 1 close. This breakeven mark sits 3% above the equity's current perch at $17.25, as well as one penny shy of the stock's two-year high -- tagged in late September. Delta for the call is docked at 0.41, or 41%, suggesting a roughly 2-in-5 chance the position will move into the money by expiration. Should the stock fail to topple the strike price, the most the traders have risked is the initial premium paid.
As noted, Ford Motor Company (NYSE:F) is slated to unveil its third-quarter earnings report before the market opens on Oct. 24. While the company has bested analysts' bottom-line estimates in seven of the past eight quarters, the stock has averaged a loss of 0.9% and 1.7% in the subsequent day and week, respectively, after revealing its results. Meanwhile, the company has had a string of recent successes in regards to its monthly sales reports.