Stocks quoted in this article:
The 20 stocks below have attracted the highest options volume -- in the front three-months' series -- 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 Tesla Motors Inc (NASDAQ:TSLA), Citigroup Inc (NYSE:C), and Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX).
Similar to sector peer Bank of America Corp (NYSE:BAC), speculators are targeting puts in C's options pits today. Volume is trading at a 15% mark-up to the average intraday pace, and spread traders are active in the October 2013 and January 2014 series. Elsewhere, around 74,000 calls have changed hands on ONXX thus far -- nearly five times the expected intraday volume -- on the heels of some well-received M&A news. Meanwhile, here is a quick look at the interesting activity in TSLA's options pits.
Option volume is accelerated on Tesla Motors Inc (NASDAQ:TSLA) -- trading at more than two times the average intraday pace -- after a report from the California New Car Dealers Association said June sales for the electric car maker's Model S sedan had outpaced a number of luxury car brands. As such, speculators in today's session are betting on the stock to make its way into uncharted territory by week's end. Two of the more popular positions on the day are the weekly 8/30 170- and 175-strike calls. A large portion of the 12,082 and 10,886 contracts traded at each strike, respectively, have done so on the ask side, volume is outstripping open interest, and implied volatility has soared. Summing it all up, it appears that new positions are being initiated.
By purchasing the weekly 8/30 170-strike calls for a volume-weighted average price (VWAP) of $4.39, speculators will begin to profit with each step north of $174.39 (strike plus VWAP) TSLA takes through Friday's close. This breakeven mark represents expected upside of 7.1% to the stock's current perch at $162.85. Meanwhile, the VWAP for the weekly 8/30 175-strike calls is $2.85, making breakeven $177.85. Delta for this call is docked at 0.19, suggesting the options market is giving the position a 19% chance of landing in the money ahead of expiration.
From a wider sentiment standpoint, option players have been picking up puts at a faster-than-usual clip in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day put/call volume ratio of 0.90 ranks in the 93rd percentile of its annual range. Given TSLA's brow-raising run up the charts this year, this uptick in put volume could represent shareholders picking up some protection against a near-term pullback. As it turns out, the equity's Relative Strength Index (RSI) of 70 is docked in overbought waters.