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 Hewlett-Packard Company (NYSE:HPQ), General Electric Company (NYSE:GE), and Exxon Mobil Corporation (NYSE:XOM). Here is a quick look at today's interesting activity in these options pits.
With Hewlett-Packard Company (NYSE:HPQ) trading in the red today, option players are upping the bearish ante from last Friday's group of skeptics. More than 4,000 contracts have traded at HPQ's May 19 put for a volume-weighted average price (VWAP) of $0.60. The majority of these have crossed at the ask price, and data from the International Securities Exchange (ISE) confirms that at least a portion of today's activity is of the buy-to-open variety. By purchasing the puts, traders need Hewlett-Packard to land below $18.40 (strike price less the VWAP) by the close on Friday, May 17 -- when front-month options expire. This breakeven mark is 5.6% below the stock's current perch at $19.50. Delta for the put is docked at negative 0.39, or 39%, suggesting a roughly 2-in-5 chance the option will be in profitable territory ahead of expiration. Should the stock fail to breach the strike price over the next four weeks, the most today's put buyers stand to lose is the initial premium paid.
General Electric Company (NYSE:GE) is continuing its recent stumble today, after last Friday's quarterly earnings results prompted a pair of bearish brokerage notes. Option players have turned a blind eye to the negative price action, though, and calls have emerged as the contracts of choice. By the numbers, roughly 56,000 calls have changed hands, compared to around 31,000 puts. Short-term speculators are eyeing an end-of-the-week rebound, by scooping up GE's weekly 4/26 21.50-strike call for a VWAP of $0.12. A healthy majority of the 2,503 contracts traded have gone off at the ask price, and volume is outstripping open interest, indicating the initiation of new bullish positions. Breakeven for the near-the-money calls is $21.62 (strike plus VWAP), or 1.7% above GE's present mark at $21.26. On the charts, General Electric's 2.2% slide today has the stock on pace to finish its second consecutive daily close below its 200-day moving average, which has not occurred since mid-November.
In XOM's options pits, traders are betting on the stock to tag an all-time high by October. The most active strike in today's session is the equity's October 100 call, which is being exchanged for a VWAP of $0.17. Of the 2,804 contracts traded, 76% have gone off at the ask price, and volume is exceeding current levels of open interest, pointing to buy-to-open activity. The breakeven level for these out-of-the-money calls is $100.17 (strike price plus VWAP), which represents a 14% premium to the equity's latest trading level of $87.93, as well as uncharted territory for XOM. Meanwhile, the oil and gas concern will release its quarterly results before the market opens on Thursday. The company has mixed results in the earnings confessional, besting bottom-line expectations in two of the past four quarters. For XOM's first quarter, analysts are calling for a profit of $2.05 per share.
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.