Stocks quoted in this article:
The 20 stocks listed below have seen 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 stock seeing interesting speculative activity today is Ford Motor Company (NYSE:F).
Ford Motor Company shares have yet to begin recovering from last Wednesday's 6.3% bear gap, spurred by a poorly received 2014 profit and sales outlook. In today's options pits, however, a group of traders is betting on the $14 level to hold as a floor through the next couple of months.
The February 2014 14-strike put is active today, with close to 8,500 contracts trading hands (versus open interest of 4,498). The lion's shares of this volume has traded off the bid price, suggesting the positions were sold. Given this collective backdrop, it's likely that some of the contracts were sold to open as a bet that Ford will maintain its footing north of $14 through February options expiration.
Ford shares have not traded below this level since mid-May, and the options market does not currently factor in high odds of this happening again anytime soon. Delta for the position stands at negative 0.21, suggesting a slightly better than 1-in-5 chance the puts will be in the money when expiration rolls around.
Spanning back a bit to look at trends in traditional option buying activity, it appears as though calls have been the contracts of choice. During the last 50 trading days on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), calls have been bought to open at a pace of nearly 4-to-1 compared to puts. The resulting call/put volume ratio of 3.74 registers higher than 70% of similar readings taking during the last 12 months. In other words, the options crowd has been relatively bullish, from a historical perspective. F has gained 28.5% in the last 52 weeks to perch at $15.23.