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 Oracle Corporation (NYSE:ORCL), Facebook Inc (NASDAQ:FB), and J.C. Penney Company, Inc. (NYSE:JCP).
FB tackled the $50 mark in fine fashion today, thanks to a continued round of upbeat brokerage attention (both Jefferies and Bernstein raised their respective price targets). The stock's rapid rise has one speculator eyeing a pullback by initiating a long put spread using the November 44 and 50 strikes. JCP has staged a solid rebound, after earlier falling to an analyst-induced 12-year low. The volatile price action has prompted an uptick in option activity, with overall volume running at more than four times the average intraday pace. Meanwhile, here is a quick look at the interesting activity in ORCL's options pits.
Calls are the preferred option on Oracle Corporation today, and have a roughly 7,000-contract lead over puts. Of the approximately 18,000 calls that have changed hands, 64% -- including several mid- and large-sized blocks -- have done so at the weekly 9/27 34.50 strike. The vast majority of these calls crossed on the ask side, implied volatility has jumped 6.6 percentage points, and less than 1,000 contracts make up open interest here. Summing it all up, it appears a fresh batch of bullish bets has been initiated.
By purchasing (to open) the out-of-the-money calls, traders expect ORCL to make a swift move above $34.50 by tomorrow's close. More specifically, their profit will increase with each step north of $34.56 (strike plus the volume-weighted average price of $0.06) ORCL takes over the course of the option's short lifetime. Based on the equity's current price of $33.78, this would require a jump of 2.3%. Considering the stock has not traded above $34.50 on an intraday basis since June 19, delta for the call is docked at 0.091, suggesting a slim 9.1% chance the option will land in the money before it expires. Should ORCL stay south of the strike, the most the speculators have risked is the modest premium paid.
Today's predilection for calls over puts just highlights the withstanding trend seen in ORCL's short-term options pits. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.70 ranks lower than 94% of similar annual readings, pointing to a call-skewed bias among near-term traders. This ratio measures both buy- and sell-to-open activity, though, and, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), not all of this action is of the traditional bullish variety. During the past 10 sessions, in fact, Oracle Corporation (NYSE:ORCL) traders have sold to open 1.32 times as many calls as they've bought.
ORCL is down 0.3% ahead of the company's analyst meeting, which was scheduled to begin at 3:00 p.m. ET this afternoon.