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 JPMorgan Chase & Co. (NYSE:JPM), Barrick Gold Corporation (USA) (NYSE:ABX), and United States Steel Corporation (NYSE:X). Here is a quick look at today's interesting activity in these options pits.
JPMorgan Chase & Co. (NYSE:JPM) is higher heading into the final hours of the session, as financial stocks enjoy another day in the green. At last check, the stock was up 1.6% at $49.92. The upward momentum won't last for long, according to the group of option players who are scooping up 4,085 of JPM's weekly 5/10 49.50-strike puts for a volume-weighted average price (VWAP) of $0.25. The majority of these contracts have crossed at the ask price, and volume is outstripping open interest, pointing to buy-to-open activity. In order for these out-of-the-money (OOTM) puts to be profitable, JPMorgan Chase must breach the $49.25 mark (strike price less the VWAP) by Friday's close. Diving deeper into the data shows that puts have been popular on JPM for some time now. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day put/call volume ratio of 0.86 ranks just 6 percentage points from a 52-week peak. In other words, puts have been bought to open over calls at a near annual-high clip in recent months. Given the stock's 13.5% year-to-date advance, this could be shareholders picking up some portfolio protection.
Barrick Gold Corporation (USA) (NYSE:ABX) is benefiting from a rise in gold prices today, amid signs pointing to growing demand in India and China. The stock has soared 8.1% to trade at $21.35. Not surprisingly, call volume has nearly tripled put volume in intraday trading. Some speculators are betting on the positive price action to continue over the next several sessions, and are picking up ABX's weekly 5/10 21.50-strike calls. Nearly all of the 3,527 calls traded have gone off at the ask price, and only 365 contracts make up open interest here, making it safe to assume that new bullish positions are being initiated. The VWAP for the OOTM calls is $0.24, making breakeven $21.74 (strike plus VWAP). Delta for the call is docked at 0.44, or 44%, suggesting a more than 2-in-5 chance the position will finish in the money by the time the closing bell sounds on Friday.
Thanks to some upbeat comments from a Rio Tinto plc (ADR) (NYSE:RIO) exec, shares of United States Steel Corporation (NYSE:X) have tacked on an impressive 6% today. With the stock currently trading at $19.32, it appears a number of option players were scrambling to cash in their bullish bets. Roughly 2,400 contracts have traded at X's July 18-strike call for a VWAP of $1.88. The majority of these positions have crossed at the bid price, and data from the ISE confirms that a number of contracts were sold to close. Widening the sentiment scope reveals that option players have been bullishly skewed toward options slated to expire in three months or less. U.S. Steel's Schaeffer's put/call open interest ratio (SOIR) of 1.04 ranks in the 34th percentile of its annual range, meaning short-term speculators are more call-heavy than usual toward X.
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.