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 this afternoon is Sprint Corporation (NYSE:S).
Sprint Corporation has seen an influx of call activity in its options pits today, with the contracts trading at a 39% mark-up to the intraday average, and outstripping puts by a more than 22-to-1 margin. The majority of the day's activity has centered on two strikes -- the June 9 call and the November 10 call, where six blocks totaling 30,000 contracts have changed hands. Diving deeper, it appears one trader is sharing in the bullish outlook of Macquarie, which moved its price target for the stock into double-digit territory on upbeat expectations toward a Sprint/T-Mobile US Inc (NYSE:TMUS) merger.
Specifically, the lower-strike calls traded at or near the bid price, suggesting they were sold, while the higher-strike calls went off at or near the ask price, implying they were bought. Meanwhile, volume outstrips open interest at the November calls, hinting at the initiation of new positions. Summing it all up, this trader may be rolling her bullish bet up and out, with the expectation that Sprint will tackle the $10 mark over the next five months -- a theory echoed by Trade-Alert.
Widening the sentiment scope reveals that call buying has been a popular strategy on S in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day call/put volume ratio of 3.91 ranks in the 82nd percentile of its annual range. In other words, calls have been bought to open over puts at an accelerated clip of late.
Outside of the options pits, sentiment toward a stock that's down nearly 18% year-to-date is less sanguine. In fact, short interest surged 20.5% during the last two reporting periods, and now accounts for 9.8% of the security's available float. In light of this, a portion of the recent call buying -- particularly at out-of-the-money strikes -- may be a result of shorts hedging against any future rally attempts. In today's session, Sprint Corporation (NYSE:S) has jumped 0.6% to $8.82 in the wake of the aforementioned price-target hike.