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 streaming video issue Netflix, Inc. (NASDAQ:NFLX), which has seen a flurry of eleventh-hour betting.
Netflix, Inc. was last seen 0.5% higher at $477.79, and is on pace for a monthly gain of 13%. Meanwhile, options traders are placing their bets on where the stock will end the session, as the 10 most active options expire at the closing bell. What's more, volume has surpassed open interest at six of those strikes, underscoring our theory of new last-minute positions.
Among those is the weekly 8/29 480-strike call, which has seen more than 6,000 contracts change hands -- the most of any strike. The speculators buying the calls to open are doing so at a volume-weighted average price (VWAP) of $0.89, meaning they'll profit if NFLX settles north of $480.89 (strike plus VWAP) today. The stock touched an intraday high of $480.50 earlier, so surpassing breakeven isn't outside the realm of possibility. Should the equity close beneath $480, the buyers will forfeit the initial premium paid for the calls.
Those selling the calls to open are expecting NFLX to remain south of the strike through the close. In this best-case scenario, the calls will remain out of the money, and the sellers can retain the initial net credit. Should NFLX climb back atop the strike, the sellers' losses will begin to add up.
While intraday calls and puts are trading near parity, the former have emerged as the preferred options -- among buyers, anyway -- of late. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day call/put volume ratio of 1.16 stands higher than 87% of all other readings from the past year. In other words, Netflix, Inc. (NASDAQ:NFLX) option buyers have picked up calls over puts at a faster-than-usual clip during the past couple of weeks.