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 Google Inc (NASDAQ:GOOG), Citigroup Inc (NYSE:C), and General Electric Company (NYSE:GE).
Citigroup Inc will take its turn in the earnings confessional before the market opens next Tuesday. Ahead of the event, one trader in today's session appears to be selling (to close) his October 48 puts below the bid price for $0.56. Also unveiling earnings next week is General Electric Company. Speculators in GE's options pits are once again taking a longer-term bullish outlook by buying (to open) the January 2014 25-strike calls. Elsewhere, here's a closer look at where Google Inc traders are placing their short-term bets.
GOOG option players have been picking up puts at a slightly accelerated clip recently, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, the stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.89 ranks in the 68th percentile of its annual range, pointing to a healthier-than-usual appetite for long puts (relative to long calls) during the past two weeks.
Today's option activity is no exception, with put volume running at a 15% mark-up to the average intraday pace. The most active position on the day is GOOG's weekly 10/11 860-strike put, which has seen nearly 4,500 contracts change hands for a volume-weighted average price (VWAP) of $1.93. A healthy portion of these puts have crossed at the ask price, implied volatility rose with some of the larger block transactions, and volume is outstripping open interest, indicating the initiation of new long positions.
Based on the entry price, these put buyers will begin to profit with each step below $858.07 (strike less the VWAP) GOOG takes through tomorrow's close. This breakeven mark sits just 0.8% below the stock's current price of $865.36. Delta for the put is docked at negative 0.22, or 22%, suggesting a less than 1-in-4 chance the option will find its way into the money ahead of expiration. Should the stock fail to breach the strike before the end of this week, the most the put buyers have risked is the initial premium paid.
On the charts, Google Inc (NASDAQ:GOOG) has done well, with the shares up more than 22% year-to-date. However, the security has succumbed to broad-market headwinds this week, and is off about 0.8% from last Friday's close. In light of this, some of today's activity at the out-of-the-money strike could represent shareholders picking up options-related insurance against any additional near-term downside.