Stocks quoted in this article:
The 20 stocks below have attracted the highest options volume -- in the front three-months' series -- during the past 10 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 Microsoft Corporation (NASDAQ:MSFT), Intel Corporation (NASDAQ:INTC), and JPMorgan Chase & Co (NYSE:JPM).
INTC is enjoying some analyst-induced upside today, while in the options pits, one speculator is targeting a put spread on the stock in the October series. Meanwhile, call volume has accelerated on JPM, as the stock rebounds from yesterday's drop. The September 55 call is once again a popular pick, as traders bet on an extended move higher over the next few weeks. Elsewhere, here is a quick look at the interesting activity in MSFT's options pits.
Microsoft Corporation (NASDAQ:MSFT) had a strong start to the year, guided higher by its 10-week moving average. However, the stock took a turn for the worse in late July following a disappointing turn in the earnings confessional, and is now staring up at the formerly supportive trendline. By the numbers, the equity hit a five-year high of $36.43 just two days before unveiling its July 18 report, and the shares have since shed 13% of their value. The equity is attempting to redeem itself today, and was last seen 1.9% higher to trade at $31.66. Despite this bounce, one speculator is calling a top to MSFT's long-term advance. Earlier in the session, one block of 5,000 April 2014 37-strike calls changed hands at the bid price of $0.64. Volume is outstripping open interest, and data from the International Securities Exchange (ISE) confirms that the calls were indeed sold to open.
Ideally, MSFT will remain south of the $37 mark through April expiration, allowing the calls to expire worthless, and the speculator to retain the initial net credit as the full potential reward on the play. Should the stock muscle its way above the strike price ahead of expiration, the call writer may be required to sell the shares at $37 apiece, regardless of where MSFT may be trading. Today's activity could also represent a covered-call strategy, in which a shareholder is selling these out-of-the-money calls to increase her rate of return while waiting for the stock to advance. In fact, MSFT has not traded north of $37 since November 2007.
From a wider sentiment standpoint, option players have shown a growing preference for traditional calls in recent weeks. At the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio has risen to 5.00 from its Aug. 1 reading of 2.53. What's more, the current ratio ranks in the 97th percentile of its annual range, meaning calls have been bought to open over puts at a near-annual-high clip during the past two weeks.
On the news front, the company should garner its fair share of attention over the next few days, after hinting that it will reveal something "exciting" at Gamescom -- which kicks off tomorrow.