Stocks quoted in this article:
Three of today's most actively traded large-cap stocks among the options crowd are mining specialist Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX - 32.44), Dow component Hewlett-Packard Company (NYSE:HPQ - 14.52), and BlackBerry parent Research In Motion Limited (NASDAQ:RIMM - 13.80). Here's a quick look at some interesting activity in these option pits today.
First up is FCX, where traders today are adding a new batch of short-term puts. The stock's 12/14 32.50-strike put has seen 3,442 contracts trade on open interest of only 1,173, and the majority of puts crossed closer to the ask price. Based on the option's volume-weighted average price (VWAP) of $0.22, today's put buyers need FCX to drop below breakeven at $32.28 before the close on Friday, when these contracts are due to expire. At last check, the stock is fractionally lower to trade at $32.44.
Meanwhile, one speculative player appears to be opening a bear put spread on HPQ. A block of 3,000 January 2013 14 puts traded at the ask price of $0.43 earlier, and a matching block of 3,000 January 2013 12 puts crossed at the bid price of $0.11 -- resulting in a net debit of $0.32 on the spread. In this strategy, the trader is looking for HPQ to finish at or below $12 upon January expiration, allowing him to achieve the maximum potential profit. In this case, that's $1.68, or the difference between the two strikes less the initial net debit.
Canada's own RIMM also seems to have attracted the attention of a bearish spread player, as a speculator sold three blocks totaling 3,725 contracts at the January 2013 12 put, and simultaneously bought an equivalent number of January 2013 14 puts. As with the HPQ strategy described above, the trader is looking for RIMM to close at or below $12 by the time January-dated options expire -- just over five weeks from today. However, shares of the smartphone stock have jumped more than 3% today, building on Wednesday's breakout above their 320-day moving average.
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.