Stocks quoted in this article:
The 20 stocks listed in the table below are the S&P 400 MidCap Index (MID) components that 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 is Toll Brothers Inc (NYSE:TOL), as last-minute bulls placed bets on the homebuilder's weekly options during Thursday's trading.
Call volume rose to 1.18 times the norm on Toll Brothers Inc yesterday, with 5,270 contracts crossing the tape. By comparison, only 952 put options were exchanged on TOL during Thursday's session, falling short of the equity's average daily volume of 1,028 contracts.
The center of attention was TOL's weekly 8/1 33-strike call, where 2,971 contracts changed hands. The majority of these calls traded closer to the ask price, suggesting they were purchased, and implied volatility at the strike popped 14.1 percentage points to close at 44.5%. Open interest at this strike rose overnight by 2,635 contracts. In other words, it appears that new bullish bets were initiated here on Thursday.
These super short-term bets were bought for a volume-weighted average price (VWAP) of $0.19. Based on this average cost of entry, yesterday's call buyers will be able to collect profits if TOL is situated north of breakeven at $33.19 (strike price plus VWAP) by the time today's closing bell sounds.
Currently, those weekly 8/1 33-strike calls have just a few hours left until they expire, with shares of Toll Brothers Inc (NYSE:TOL) up 0.4% at $32.81. The stock needs to gain another 0.6% for the calls to finish in the money, and TOL must advance more than 1.2% before Thursday's option bulls can profit.