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 Tesla Motors Inc (NASDAQ:TSLA).
Tesla Motors Inc ran to a new record high of $259.20 earlier in the wake of some upbeat analyst attention and a "Top-Pick" rating from Consumer Reports. The burst of buying power has put and call players flocking to the stock's options pits, with contracts from both sides of the aisle trading at four times typical intraday levels. In fact, TSLA options are the most actively traded among individual equities, and from a broader perspective, second only to the SPDR S&P 500 ETF Trust (SPY). Amid this increased demand, the equity's 30-day at-the-money implied volatility (IV) has jumped 5.5 percentage points to 55.6%.
One speculator in particular is eyeing additional gains for Tesla Motors through week's end, but instead of buying a call straight out, has decided to limit her risk by initiating a bull call spread. Specifically, two symmetrical sweeps of 1,519 weekly 2/28 255- and 260-strike calls simultaneously crossed the tape earlier, the former near the ask price for $3.92 apiece, and the latter closer to the bid price for $2.52 each. IV rose at both legs, and volume outstrips open interest at each strike, suggesting the initiation of new positions.
The net debit for the spread is $1.40, which is the most the speculator stands to lose if TSLA does not move above the breakeven mark of $256.40 by this Friday's close. Meanwhile, her maximum potential profit of $3.60 per pair of contracts (difference between the two strikes less the net debit) will be realized if Tesla Motors Inc lands at or above the $260 mark by week's end. Regardless of how far TSLA may rise over the next three-plus sessions, though, gains for the spread strategist are capped by the sold strike.
As touched upon, Tesla Motors Inc (NASDAQ:TSLA) came within striking distance of the $260 mark earlier, but was last seen lingering near $252.66. As my colleague Andrea Kramer noted this morning, the stock could see additional analyst-induced gains, should this week's "gigafactory" announcement prompt some of the remaining holdouts to jump ship.