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 Nokia Corporation (ADR) (NYSE:NOK), 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.
Nokia Corporation's (ADR) (NYSE:NOK) 2.2% pop in today's session has some long-term bearish bettors hitting the exits. The stock's January 2014 5-strike put has seen 2,000 contracts cross the tape for a volume-weighted average price (VWAP) of $1.85. All of these LEAPS have gone off at the bid price, and open interest exceeds volume, suggesting that some of the positions are being sold to close. With the stock currently trading at $3.31, it appears (depending on what the initial cash outlay was) that traders are attempting to limit their losses against any additional upside. More gains aren't necessarily out of the question for NOK. The equity is in the green today after an article on Bloomberg.com this morning said the mobile phone maker will soon release its $20 smartphone -- currently available in India and Indonesia -- into European markets. Looking ahead, Nokia Corporation announced a May 14 press conference, where it is expected to unveil the latest iteration of its Lumia device.
Shares of General Electric Company (NYSE:GE) have stuck close to the $22 mark since taking a post-earnings stumble last week, and were last seen hovering near $22.26. One bold speculator in today's session is betting on GE to set up camp in this neighborhood for the long haul, and picked up two symmetrical blocks totaling 2,000 contracts at General Electric's January 2015 22-strike put and January 2015 22-strike call. Both blocks traded closer to the bid prices of $3.11 and $2.32, respectively. Data from the International Securities Exchange (ISE) confirms that new positions were created, so it appears that a short straddle was initiated for a net credit of $5.43. Ideally, this strategist wants GE to be exactly at $22 when these LEAPS expire, allowing both legs to finish worthless. However, she can still retain a portion of the premium as long as General Electric remains trading between $16.57 (strike minus net credit) and $27.43 (strike plus net credit). This play isn't for the faint of heart, as risk is theoretically unlimited to the upside, and can be quite substantial to the downside.
Exxon Mobil Corporation (NYSE:XOM) has tacked on 0.8% today to trade at $88.74. The stock is now on pace to clock its sixth straight daily close atop its 10-day moving average, and one group of traders is expecting this newfound layer of support to hold through week's end. More than three-quarters of the 1,228 weekly 5/3 87.50-strike puts have traded at the bid price, and volume is outstripping open interest, pointing to sell-to-open activity. By initiating these short puts, traders are betting on XOM to finish the week above the strike price. In this best-case scenario, the options will expire worthless, and the traders can pocket the initial premium collected, which Trade-Alert indicated was $0.32. From a wider sentiment standpoint, traders at the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been using puts in the traditional sense. Exxon Mobil's 10-day put/call volume ratio on these exchanges sits at 2.07 -- in the 82nd percentile of its annual range. In other words, puts have been bought to open over calls with more rapidity just 18% 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.