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 today is Yahoo! Inc. (NASDAQ:YHOO), which has seen notable put volume this afternoon.
Digging deeper, Yahoo! Inc. puts are trading at a 10% mark-up to the average intraday pace so far. Most active is the weekly 8/8 35.50-strike put, where nearly 9,900 contracts have changed hands. However, it doesn't appear that today's speculators are bearish, as the majority of the contracts have crossed at the bid price -- suggesting they were sold. What's more, volume outstrips open interest at the strike, hinting at the initiation of new neutral-to-bullish positions.
By writing the puts to open, today's traders anticipate YHOO will maintain its perch atop $35.50 through the end of the week, when the weekly options cease trading. Should that occur, the contracts will expire worthless, and the sellers will retain the initial premium collected as their maximum potential reward. However, if the Internet stock should drop below the strike between now and then, the traders will be at risk of assignment, and face potential losses on a move all the way down to zero.
On the charts, Yahoo! Inc. (NASDAQ:YHOO) has been churning in the $33-to-$37 range since late March. More recently, however, the shares have rallied roughly 10% from their mid-July low of $32.93 -- including a 1.6% gain today -- to wink at the $36.18 level. Over the past week, the equity has found double-barreled support atop its 100-day moving average (currently located at $35.05) and the $35.50 level, which could act as a springboard going forward.