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Of the 20 equities seeing the heaviest options volume in recent sessions, three names of notable interest this afternoon are Apple Inc. (NASDAQ:AAPL - 461.29), Google Inc (NASDAQ:GOOG - 812.07), and Hewlett-Packard Company (NYSE:HPQ - 22.87). Here is a quick look at today's interesting activity in these options pits.
Eleventh-hour option traders are targeting AAPL today, and the stock's 3/22 460-strike call has emerged as the most active position thus far. The near 55,000 contracts that have traded here are going off on both the ask and the bid side of the fence, for a volume-weighted average price (VWAP) of $0.94. Volume is outstripping open interest, and data from the International Securities Exchange (ISE) confirms the strike is seeing a mix of buying- and selling-to-open activity. By purchasing the out-of-the-money calls, traders will profit with each step north of $460.94 (strike plus VWAP) AAPL takes through tonight's close, when the options expire. Meanwhile, the call writers expect AAPL to fall back below the $460 mark by the end of the session, allowing the options to expire worthless, and the speculators to pocket the $0.94 per contract, which is also the maximum reward on the play. At last check, Apple Inc. was up 1.3% amid rumors the newest iterations of the iPad and iPhone will be unveiled this summer.
Puts are the options of choice in Google's options pits today. Around 45,000 contracts have crossed the tape so far, representing a 28% mark-up to the average intraday volume. By comparison, roughly 21,000 calls have changed hands. The equity's 3/28 780-strike put is one of the more sought after options, where more than 3,300 contracts have traded, mostly at the ask price. Implied volatility has ticked 2.9 percentage points higher, and volume is exceeding current open interest levels, pointing to the initiation of new positions. Breakeven for the out-of-the-money puts is $778.66 (strike less VWAP of $1.34), or 4.1% below current levels. Delta for the put is resting at negative 0.11, or 11%, suggesting the options market is giving the position a slim 1-in-10 chance of landing in profitable territory by next Thursday's close, when the options expire.
HPQ is following in the bullish footsteps of the Dow today, and last-minute optimists are hoping to capitalize on the positive price action. Hewlett-Packard's 3/22 22.50-strike call is the most active option heading into the final hours of the session, where 7,518 contracts have crossed at a VWAP of $0.28. The majority of the calls have crossed at the ask price, and only 3,888 contracts make up open interest, suggesting some of today's activity is of the buy-to-open variety. The breakeven mark for the in-the-money calls is $22.78, which HPQ has already surpassed in intraday trading. At last check, Hewlett-Packard was up 2.5% to trade at $22.87.
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.