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 today is Microsoft Corporation (NASDAQ:MSFT), with traders targeting short-term gains for the stock.
Microsoft Corporation's 30-day at-the-money implied volatility (IV) has tacked on 5.4% to 20.3%, signaling elevated demand for short-term strikes. Accordingly, the Windows parent's most active option is the September 44 call. The majority of the nearly 10,600 contracts traded here have done so at the ask price, and IV is edging higher, hinting at freshly bought bullish bets. Data from the International Securities Exchange (ISE) confirms this theory, as well.
By scooping up the long calls at a volume-weighted average price (VWAP) of $0.60, the speculators are gambling on the shares finishing above $44.60 (strike plus VWAP) at the close on Friday, Sept. 19 -- when back-month options expire. Potential gains are theoretically infinite north of this breakeven mark, whereas potential losses are capped at the initial premium paid, should the stock finish below the strike at expiration.
Taking a step back, Microsoft Corporation (NASDAQ:MSFT) has been a strong performer on the charts -- up 36% on an annual basis -- and was trading north of $44.60 as recently as July 25. While the shares are 0.4% lower at midday (perched near $42.92) amid news of raids by the Chinese government, they appear to have found a foothold at their ascending 50-day moving average, which could serve as a level of support going forward.