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Most Active Options: Cisco Systems (CSCO), Intel Corporation, and JPM

CSCO, INTC, and JPM are seeing notable options trading activity today

by 4/19/2013 3:06 PM
Stocks quoted in this article:

Of the 20 equities seeing the heaviest options volume in recent sessions, three names of notable interest this afternoon are Cisco Systems, Inc. (NASDAQ:CSCO), Intel Corporation (NASDAQ:INTC), and JPMorgan Chase & Co. (NYSE:JPM). Here is a quick look at today's interesting activity in these options pits.

Cisco Systems, Inc.'s (NASDAQ:CSCO) technical troubles have been mentioned numerous times in this space, and the stock is continuing its struggle in today's session. At last check, the equity was down 0.6% to trade at $20.45. One group of speculators is hoping to profit on an additional slide, and is picking up the stock's June 21 put for a volume-weighted average price (VWAP) of $1.23. The vast majority of the 5,739 contracts traded have gone off at the ask price, and volume is outstripping open interest, pointing to the initiation of new bearish positions. By purchasing these in-the-money puts, traders will begin to profit with each step south of $19.77 (strike price less VWAP) Cisco Systems takes through June expiration. Delta for the put is currently docked at negative 0.58, or 58%, suggesting a nearly 3-in-5 chance the option will finish in the money ahead of expiration.

Intel Corporation (NASDAQ:INTC) is trading in the green today, prompting some speculators to bet on a continued rise in the near term. Nearly 2,400 calls have traded at INTC's weekly 4/26 22.50 strike, mostly at the ask price. Volume is exceeding current levels of open interest, indicating buy-to-open activity. Breakeven for the near-the-money calls is $22.68 (strike plus VWAP of $0.18), or 1.3% above the stock's current perch at $22.38. From a wider sentiment standpoint, option players have preferred calls over puts on INTC in recent weeks. During the course of the past 20 sessions, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 223,765 calls, compared to 188,854 puts, resulting in a call/put volume ratio of 1.18. Fundamentally, Intel Corporation has reportedly put in a bid for application programming interface (API) issue Mashery.

JPMorgan Chase & Co. (NYSE:JPM) is also getting some attention from the short-term options crowd today. The stock's weekly 4/26 45.50-strike put is one of the more sought after contracts, where 61% of the 3,995 contracts have traded at the ask price. Only 58 positions currently make up open interest here, making it safe to assume that fresh positions are being created. In order for these puts to be profitable, JPM must fall below $45.35 by next Friday's close, which is the strike price minus the VWAP of $0.15. This breakeven mark represents expected downside of 4% from JPMorgan's present trading level at $47.22. Expanding the sentiment scope reveals that JPM speculators have increased their exposure to short-term puts throughout the month of April. Since April 1, the security's Schaeffer's put/call open interest ratio (SOIR) has risen to 1.12 from 1.08, as near-term put open interest jumped nearly 28%. This ratio ranks in the put-skewed 74th percentile of its annual range.

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.

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