Stocks quoted in this article:
The 20 stocks below have attracted the highest options volume -- in the front three-months' series -- during the past five 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 Intel Corporation (NASDAQ:INTC), Bank of America Corp (NYSE:BAC), and Facebook Inc (NASDAQ:FB).
BAC is in the red today, after the financial firm was hit with a bearish brokerage note this morning. One trader may be protecting his paper profits from a steeper slide by purchasing a block of 10,000 January 2014 12-strike puts. Meanwhile, FB jumped to a fresh record peak of $51.28, thanks to another round of upbeat analyst attention. Not surprisingly, calls are outpacing puts in FB's options pits by a margin of more than 2-to-1. Elsewhere, here is a quick look at the interesting activity in INTC's options pits.
Intel Corporation is one of the main laggards on the Dow Jones Industrial Average (DJI) this afternoon, with the shares down 2% to trade at $22.93. A number of speculators are betting on this retreat to continue over the next two months by purchasing December 22 puts. Nearly all of the 44,056 contracts traded here -- including one large lot of 18,986 -- changed hands at the ask price. Implied volatility has ticked higher, and volume is easily outstripping open interest, pointing to the initiation of a new batch of bearish bets. Data from the International Securities Exchange (ISE) confirms buy-to-open activity.
By establishing the long puts, traders expect INTC to fall south of $22 by the close on Dec. 20 -- a situation that has not occurred on an intraday basis since Sept. 3. More specifically, they will begin to profit with each move below $21.39 (strike less the volume-weighted average price of $0.61) the stock takes between now and December expiration. This breakeven mark represents expected downside of 6.9% from current trading levels. Delta for the option is docked at negative 0.36, suggesting a 36% chance the put will find its way into the money during the course of its lifetime. Should INTC fail to breach the strike price, the most the speculators will have to surrender is the initial cash outlay. In the case of the aforementioned block trader (assuming he holds the position through expiration), this would translate into a loss of nearly $1.16 million, which is the number of contracts, times the $0.61 premium, times 100 contracts per share.
Technically, Intel Corporation (NASDAQ:INTC) has tacked on a modest 11.8% in 2013. From a longer-term perspective, though, the stock is sitting fractionally below where it was one year ago.