Stocks quoted in this article:
The 20 stocks listed below have seen the highest total options volume over the course of the last 10 trading days. Data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White, and highlighted names are new to the list since the last study was run. One stock seeing notable activity among put players is Micron Technology, Inc. (NASDAQ:MU).
Micron Technology, Inc. shares are continuing to chug up the charts. Up more than 25% in 2014 -- with a year-over-year gain of close to 160% -- the stock tagged a fresh 12-year high of $27.78 in yesterday's trading. Moreover, from a relative strength basis, the shares have outperformed the broader S&P 500 Index (SPX) by 21 percentage points over the last month. MU has dipped slightly lower today amid a general market malaise, hitting the $27.30 level. In response, some hasty speculators have headed to the options pits to place near-term bearish bets.
The most active MU strike today is the June 26 put. More than 5,200 contracts have changed hands here, almost two-thirds of which traded at the ask price. What's more, implied volatility has ticked higher, suggesting long puts are being traded to open. Given the volume-weighted average price (VWAP) of $0.71 for this put, the breakeven price (at expiration on Friday, June 20) is $25.29, or the strike price less the VWAP. The stock last closed below this breakeven level on April 29.
Today's put buyers are not alone in their skepticism toward MU. During the past 10 days, the stock has racked up an International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.34. While the absolute number may not seem impressive (as nearly three times as many calls are still being bought to open versus puts), the relative magnitude of the figure is notable. Specifically, the ratio is higher than 74% of all readings taken from the past year. In short, demand for long puts is elevated, even as the stock approaches new historical highs. Should Micron continue to gain ground, recent additions to the bearish bandwagon may change their tune, resulting in additional buying pressure.
Similarly, Micron Technology, Inc. (NASDAQ:MU) could benefit from an increase in short-covering activity. Currently, more than 11% of the stock's available float is sold short, representing a healthy amount of sideline buying power for the near term.