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 Microsoft Corporation (NASDAQ:MSFT), Potash Corp./Saskatchewan (USA) (NYSE:POT), and Intel Corporation (NASDAQ:INTC).
Despite a downgrade earlier from Cantor, POT is trading higher, prompting traders to continue to add bullish positions on the September 33 call. Meanwhile, with INTC earnings roughly a month away, one speculator is either rolling up his put positions in the October series, or perhaps initiating a long put spread. Elsewhere, here is a quick look at the interesting activity in MSFT's options pits.
Microsoft Corporation (NASDAQ:MSFT) is trading higher today, after the tech issue last night said it was passing out a round of pink slips to both contract and freelance writers at its MSN news and entertainment division. At last check, the stock had tacked on 1% to trade at $33.01. Against this backdrop, calls are outpacing puts in MSFT's options pits by a margin of more than 2-to-1. The most active strike on the day is the September 35 call, which has seen 14,438 contracts change hands for a volume-weighted average price (VWAP) of $0.05. Nearly all of these out-of-the-money calls have crossed on the ask side, implied volatility is up, and data from the International Securities Exchange (ISE) confirms buy-to-open activity.
Based on the average entry price, MSFT must topple the $35.05 mark (strike plus the VWAP) by next Friday's close. The last time this level was reached on an intraday basis was Aug. 23. The options market doesn't seem too sure the call will find its way into the money over the next five-plus sessions, as delta is currently docked at 0.094, or 9.4%. Should the security fail to topple the strike price during the course of the call's lifetime, the most the speculators have risked is the modest premium paid.
Looking elsewhere, it appears that peak call open interest in the front-month series already resides at the September 35 strike. To the dismay of today's call buyers, this level could serve as a short-term speed bump for MSFT, as the 247,892 contracts begin to unwind ahead of next Friday's expiration.