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Most Active Options Update: Yahoo! Inc. (YHOO)

Option traders take sides on Yahoo! Inc.'s short-term trajectory

by 2/11/2014 1:48 PM
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 Yahoo! Inc. (NASDAQ:YHOO).


After a slow start to the year, Yahoo! Inc. appears to have resumed its upward momentum, rebounding 11% from its late-January low of $34.45 to linger near $38.32. Against this up-and-down price action, today's option players are split on the equity's near-term trajectory.

For starters, the most active strike in today's session is the February 41 call, where more than 6,600 contracts have changed hands, mostly at the ask price. Implied volatility (IV) has ticked 1.0 percentage point higher at last check, indicating the initiation of new bullish positions.

Placing bets on YHOO to regain its footing north of $41 by next Friday's close -- when front-month options expire -- has been popular in recent months, though. Specifically, the February 41 call holds open interest of 15,969 contracts, and according to the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the majority of positions initiated here since Nov. 19 have been of the buy-to-open variety. YHOO traded north of the $41 mark on an intraday basis as recently as Jan. 15.

Meanwhile, the weekly 2/14 37.50-strike put is also seeing notable attention in YHOO's options pits today. Of the 2,215 contracts traded here, 61% have done so on the ask side, IV is up 0.6 percentage points, and volume is outstripping open interest. Summing it all up, it appears a number of these Yahoo! Inc. (NASDAQ:YHOO) puts have been bought to open. Delta for the put is currently docked at negative 0.25, or 25%, suggesting a 1-in-4 chance the position will be in the money at Friday's close.


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