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. One name of notable interest is Intel Corporation (NASDAQ:INTC), as put players from both the long and short side target the stock.
Intel Corporation has rallied roughly 30% over the past three months, and has outperformed the broader S&P 500 Index (SPX) by nearly 24 percentage points over that same time frame. In today's session -- with the stock's 14-day Relative Strength Index (RSI) of 67 teetering dangerously close to overbought territory -- the equity is trading 0.4% lower at $34.80. In the stock's options pits, put volume is running at a 37% mark-up to what's typically seen at this point in the day, and traders are split on the stock's long- and short-term trajectory.
The most active INTC option is the April 28 put, where almost all of the volume changed hands when a block of 12,000 contracts was bought to open at an ask price of $0.54 apiece, resulting in an initial net debit of $648,000 (number of contracts * premium paid * 100 shares per contract). This is the most the speculator stands to lose, should INTC finish north of the strike at April 2015 options expiration. Profit, by contrast, will accrue on a move below breakeven at $27.46 (strike less premium paid).
Meanwhile, INTC's weekly 9/12 34.50-strike put has also received notable attention, where 7,165 contracts have changed hands -- mostly at the bid price, hinting at seller-driven activity. Only 1,652 contracts are currently in residence here, making it safe to assume new positions are being initiated.
By writing the puts to open, the traders expect Intel Corporation (NASDAQ:INTC) to finish north of $34.50 at the close on Friday, Sept. 12, when the options expire. In this best-case scenario, the puts will expire worthless, and the traders can retain the initial net credit collected as their maximum potential reward. At last check, delta for the put was docked at negative 0.41, suggesting a roughly 2-in-5 chance the option will be in the money at expiration.