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Of the 20 equities seeing the heaviest options volume in recent sessions, three names of notable interest this afternoon are Barrick Gold Corporation (USA) (NYSE:ABX), Ford Motor Company (NYSE:F), and Oracle Corporation (NASDAQ:ORCL). Here is a quick look at today's interesting activity in these options pits.
Although hitting a record low of $14.67 earlier in the session, Barrick Gold Corporation (USA) (NYSE:ABX) has rebounded, and was last seen 5.7% higher to linger near $15.73. This is more of a dead-cat bounce than an honest turnaround, according to the speculators who are scooping up the stock's weekly 7/5 14.50-strike puts for a volume-weighted average price (VWAP) of $0.29. Of the 2,394 contracts that have changed hands, 92% have crossed at the ask price, implied volatility has ticked higher, and volume is outstripping open interest, pointing to buy-to-open activity. The expectation for purchasing the out-of-the-money (OTM) puts is for ABX to slide below breakeven at $14.21 (strike less VWAP) before next Friday's close. Option players aren't the only crowd with a pessimistic outlook toward ABX. Deutsche Bank followed in the recent footsteps of Credit Suisse, and cut its price target for the stock this afternoon.
Ford Motor Company (NYSE:F) option players are as optimistic about next Tuesday's June sales report as analysts are. The vast majority of the 2,008 August 15 calls that have been exchanged have done so on the ask side, and data from the International Securities Exchange (ISE) confirms that a number of these positions have been bought to open. With F currently trading at $15.59, these calls are in the money. However, in order for the traders to profit, the stock must topple the breakeven price of $15.98 (strike plus VWAP of $0.98) before the close on Friday, Aug. 16. Considering the equity has added an impressive 54.6% throughout the past 52 weeks, calls have been the options of choice in recent months. At the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), F's 50-day call/put volume ratio of 3.36 ranks in the 72nd percentile of its annual range. In other words, calls have been bought to open over puts at an accelerated clip of late.
It appears that Oracle Corporation's (NASDAQ:ORCL) earnings-induced sell-off has subsided, and, in today's session, the stock was 0.3% higher to hover around $30.55. The bounce has one group of speculators betting on newfound support near $29, and they're picking up the equity's January 2014 29-strike puts for a VWAP of $1.70. Nearly all of the 5,000 contracts traded have gone off on the bid side, and 1,773 contracts make up open interest here. Summing it all up, it appears that a number of these puts are being sold to open. Ideally, ORCL will remain perched atop the $29 mark through January expiration, allowing the puts to expire worthless, and the traders to retain the initial credit collected. Put writing has been popular in ORCL's options pits recently, per data from the ISE, CBOE, and PHLX. Specifically, 1.18 short puts have been initiated for each long put throughout the past 10 sessions.
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.