Stocks quoted in this article:
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. Three names of notable interest this afternoon are Intel Corporation (NASDAQ:INTC), JPMorgan Chase & Co (NYSE:JPM), and Tesla Motors Inc (NASDAQ:TSLA).
JPM is hovering around breakeven this afternoon, following last night's cautious warning from Moody's. In the stock's options pits, both the January 2014 and 2015 series have been targeted by spread strategists. Meanwhile, TSLA jumped to another record high, causing option volume to rise to two times its average intraday pace. Elsewhere, here is a quick look at the interesting activity in INTC's options pits.
Intel Corporation (NASDAQ:INTC) has been a broad-market laggard in recent months, and has underperformed the S&P 500 Index (SPX) by more than 8 percentage points over the past 60 sessions. The equity has also surrendered 6.7% in the same time frame. Although the security is trading higher today, one speculator is betting on INTC to resume its downward trajectory in the near term. Specifically, two symmetrical blocks of 10,000 contracts simultaneously traded at the October 20 and 22 puts. The former crossed at the bid price for $0.17, while the latter changed hands above the ask price for $0.63. With implied volatility on the rise at each strike, it appears a long put spread was initiated for a net debit of $0.46.
By implementing this skeptically slanted strategy, the trader expects INTC to fall south of breakeven at $21.54 (bought strike less the net debit) ahead of the close on Oct. 18 -- a period of time that encompasses the company's quarterly earnings report. Ideally, the stock will finish at or below $20 (INTC is currently trading at $22.44), allowing the trader to pocket the full potential reward of $1.54 (the difference between the two strikes less the initial cash outlay). If INTC is still trading north of $22 at expiration, the maximum loss is capped at 100% of the premium paid.
This bearish bias is just more of the same in INTC's options pits, though, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). In fact, the stock's 10-day put/call volume ratio of 1.04 on these exchanges ranks in the 86th percentile of its annual range. In other words, puts have been bought to open over calls at a faster clip just 14% of the time within the past year.