Stocks quoted in this article:
Three of today's most popular names among options players are Facebook Inc (NASDAQ:FB - 20.39), Citigroup Inc. (NYSE:C - 36.40), and Netflix, Inc. (NASDAQ:NFLX - 77.20). Here is a brief look at some notable activity we are seeing in these option pits today.
FB has attracted some short-term put buyers today, as the near-the-money November 20.5-strike put has posted volume of more than 4,400 contracts on non-existent open interest. The bearish traders are paying an average price of $0.71 per contract, making the breakeven price at expiration next Friday $19.79 (strike less premium paid). Put buying has ramped up on FB of late, as evidenced by put/call volume ratio readings of buy-to-open activity on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The 50-day ratio is 0.86, while the 10-day ratio is 1.38. In other words, put buyers have grown more prevalent in recent weeks.
Speculators in C, on the other hand, may be closing out of an earlier spread trade as the stock moves against them. Symmetrical blocks of roughly 6,600 contracts traded this morning on the November 37 and 39 calls, with the former trading at the ask price and the latter going off at the bid price. If these were new positions, it would likely be a bull call spread changing hands for a net debit. Given the existing open interest, however -- and falling implied volatility measures at both strikes -- these traders could be buying to close an existing bear call spread. C is higher today, defying the bearish mood in the market, and has outperformed the S&P 500 Index (SPX) by 26 percentage points in the past three months.
Elsewhere, NFLX traders are putting on short-term bets, as the 11/9 weekly 80-strike calls and 75-strike puts are seeing the most attention today. These options, which are both out-of-the-money, appear to be seeing a mixture of buying and selling activity as traders hope to net a quick profit ahead of tomorrow's closing bell. The shares are continuing to consolidate sideways following their Carl-Icahn-related pop higher on Oct. 31.
The 20 stocks below have attracted the highest options volume -- in the front three-months' series -- during the past two weeks. Data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White.