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 Intel Corporation (NASDAQ:INTC), Microsoft Corporation (NASDAQ:MSFT), and JPMorgan Chase & Co (NYSE:JPM).
Microsoft Corporation will release its quarterly earnings report after the Oct. 24 close. Leading up to this scheduled event, one speculator appears to be rolling up her put position in the January 2014 series. Elsewhere, JPMorgan Chase & Co is starting the week off with some analyst-induced headwinds. JPM traders, meanwhile, are eyeing a short-term ceiling by selling to open the weekly 11/8 53.50-strike calls. Finally, here's a closer look at where Intel Corporation option players are placing their pre-earnings bets.
Ahead of tomorrow's turn in the earnings confessional, Intel Corporation is once again seeing accelerated put activity in its options pits. By the numbers, roughly 40,000 contracts have changed hands, representing a 27% mark-up to INTC's average intraday put volume. Traders have shown particular interest in the October 20 put, which has seen 11,103 contracts -- including one large block of 7,652 -- change hands for a volume-weighted average price (VWAP) of $0.04. Almost all of these puts have crossed on the ask side, and implied volatility has soared 22.3 percentage points, hinting at buy-to-open activity.
By initiating these long puts, speculators are betting on INTC to breach the $19.96 mark, which is the strike price less the VWAP, by this Friday's close. This breakeven mark sits roughly 14.6% below the equity's current price at $23.36. Considering the stock has not traded south of $20 since last December, delta for the put is docked at negative 0.03, suggesting a slim 3% chance the option will move into the money over the course of its short lifetime. Should the equity maintain its perch atop this round-number level through week's end, the most the speculators have risked is the modest premium paid.
As touched upon, Intel Corporation (NASDAQ:INTC) will unveil its earnings results after the market closes tomorrow. Wall Street is projecting a per-share profit of 53 cents for the Dow component's third quarter. Historically, Intel has matched or exceeded analysts' bottom-line estimates in seven of the past eight quarters. Given INTC's respectable 13.3% year-to-date advance, a portion of today's activity at the out-of-the-money October 20 put could represent shareholders picking up some pre-earnings options-related insurance.