Stocks quoted in this article:
The 20 stocks below have attracted the highest options volume 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 QUALCOMM, Inc. (NASDAQ:QCOM), AT&T Inc. (NYSE:T), and Nokia Corporation (ADR) (NYSE:NOK).
T is having a busy day, as news swirls over a possible cell-tower sale, a partnership with Mexico's America Movil SAB de CV (ADR) (NYSE:AMX), a bullish brokerage note from Credit Suisse, and an end-of-the-month release date for the Samsung Galaxy S(R) III mini. Against this backdrop, one speculator is targeting the stock's October series of options for a put ratio spread. Meantime, calls are outpacing puts by a margin of nearly 6-to-1 in NOK's options pits today, after the security ran to a fresh 52-week peak on the heels of an early morning upgrade. Elsewhere, here is a quick look at the interesting activity in QCOM's options pits.
It's all about the calls in QUALCOMM, Inc.'s (NASDAQ:QCOM) options pits today. At last check, roughly 27,000 calls had crossed the tape -- a 63% mark-up to the average intraday volume, and nearly three times the number of puts that have been exchanged. The October 80 call is the most active strike thus far, where 5,550 contracts have changed hands for a volume-weighted average price (VWAP) of $0.07. All but 1% of these calls have gone off on the ask side, implied volatility is up 3.3 percentage points, and volume is easily outstripping open interest at this deep out-of-the-money strike. Summing it all up, it appears that new bullish positions are being initiated.
By purchasing the calls, the speculators believe QCOM will muscle its way north of $80 ahead of the close on Oct. 18. More specifically, the traders will begin to profit with each step north of $80.07, which is the strike plus the VWAP, the stock takes over the next four-plus weeks. This breakeven mark sits about 15% above the equity's current perch at $69.53. Considering QCOM hasn't traded north of $80 on an intraday basis since March 2000, delta for the call is docked at 0.037, suggesting a roughly 4% chance the position will find its way into the money throughout the course of its lifetime. Should the security fail to topple the round-number strike price, the most the speculators have risked is the modest premium paid.
Today's campaign for calls marks a change of pace in QUALCOMM's options pits. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 0.94 ranks in the 97th percentile of its annual range. In other words, puts have been bought to open (relative to calls) at a near-annual-high clip in recent weeks.
As I mentioned yesterday, though, given the equity's respectable showing on the charts of late, the withstanding penchant for puts could be indicative of shareholders picking up hedges. Now appears to be an opportune time to do so on the cheap, as QCOM's Schaeffer's Volatility Index (SVI) of 20% ranks lower than 82% of similar readings taken over the past year. Simply stated, the equity's short-term options are relatively inexpensive at the moment.