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Of the 20 equities seeing the heaviest options volume in recent sessions, three names of notable interest this afternoon are General Electric Company (NYSE:GE), Cisco Systems, Inc. (CSCO), and Oracle Corporation (NASDAQ:ORCL). Here is a quick look at today's interesting activity in these options pits.
Calls are the options of choice on General Electric Company (NYSE:GE) today. Around 16,000 of these bullishly slanted bets have crossed the tape, compared to roughly 12,000 puts. GE's May 24 call has seen 2,321 contracts change hands, mostly at the ask price, pointing to buyer-driven volume. Implied volatility was last seen higher, and data from the International Securities Exchange (ISE) suggests a number of these positions were bought to open. The volume-weighted average price (VWAP) for the out-of-the-money calls is $0.19, making breakeven $24.19 (strike price plus VWAP), or 5.1% above the stock's current price of $23.02. Risk, meanwhile, is limited to the initial cash outlay. Technically, the Dow component has added a formidable 16.5% year-over-year. Fundamentally, General Electric is slated to release its first-quarter earnings report before the market opens on Friday, April 19. Analysts are calling for a per-share profit of 35 cents. Additionally, the company's annual shareholder meeting is scheduled for Wednesday, April 24, according to Thomson Reuters.
Cisco Systems, Inc. (CSCO) has shed more than 4% of its value since tagging a new annual high of $21.98 on March 11, and one group of option traders in today's session is betting on a steeper slide over the long term. Nearly 1,700 contracts have crossed at CSCO's October 16 put for a VWAP of $0.23. The majority of the positions have gone off at the ask price, and volume is outstripping open interest, hinting at the initiation of new positions. By purchasing the deep out-of-the-money puts, traders will profit with each step below breakeven at $15.77 (strike less VWAP) Cisco Systems takes over the next six months. Delta for the put is currently perched at negative 0.10, or 10%, meaning the options market is giving the position a 1-in-10 chance of landing in the money by October expiration.
Oracle Corporation (NASDAQ:ORCL) is trading modestly lower today, and some speculators expect this negative price action to continue over the next six weeks. The stock's May 32 put is one of the more active strikes today, where 90% of the 1,430 contracts have traded at the ask price. The VWAP for the puts is $0.74, meaning the contracts will be profitable should ORCL breach breakeven at $31.26 through the close on Friday, May 17 -- when back-month options expire. From a wider sentiment standpoint, calls have been in order on ORCL in recent weeks. At the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 2.57 ranks in the 91st percentile of its annual range. In other words, calls have been bought to open over puts with more rapidity just 9% of the time within the past year.
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.