Stocks quoted in this article:
Of the 20 equities with the heaviest options volume in recent sessions, three names of notable interest this afternoon are Intel Corporation (NASDAQ:INTC - 20.63), Nokia Corporation (ADR) (NYSE:NOK - 3.99), and Microsoft Corporation (NASDAQ:MSFT - 27.12). Here is a quick look at today's interesting option activity in these options pits.
Notable options activity is again taking shape in the INTC options pits, as total call volume is currently pacing slightly ahead of the normal intraday levels, despite light holiday trading across the market. Most active is the January 21 call, where about 7,800 contracts have changed hands. The large majority of this volume has traded at the bid price, suggesting sellers. While much of this activity may be the work of long call buyers closing out of their trades before tomorrow's market holiday, data from the International Securities Exchange (ISE) suggests some of these out-of-the-money calls are being sold to open. This is a bet that INTC will stay pegged below the $21 mark through January options expiration, and/or that INTC shareholders are willing to sell out of their positions at the $21 price point, should these short calls be part of a covered-call strategy.
Weekly options players are taking an interest in NOK, as the stock hovers around the round-number $4 mark. The most active strikes this morning are the 12/28 4-strike put and 4-strike call. Today's volume exceeds existing open interest at both strikes, pointing to the initiation of new positions, though both strikes appear to be seeing a mixture of buying and selling. Although NOK has outperformed the S&P 500 Index (SPX) -- in terms of relative strength -- by almost 54 percentage points during the last two months, the options crowd has shown a preference for the bearish camp in recent trading. In the past 10 sessions, the number of puts bought to open on the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) has topped the number of calls by a five-to-four margin. The resultant put/call volume ratio of 1.25 is higher than 86% of the past year's readings, suggesting pessimism is nearing an annual peak.
MSFT is also seeing heavy call activity, which has roughly doubled put volume in mid-morning action. The most active strike is the out-of-the-money January 29 call, where about 5,800 contracts have traded, some of which were sold to open per ISE data. Additionally, the 12/28 27-strike call is in focus, as 2,200 contracts have changed hands, exceeding current open interest. While the majority of these weekly options have traded at the bid price (signifying selling activity, possibly to close), the largest block (575 contracts) traded at the ask and is likely a bet that MSFT will move higher over the course of this week.
The 20 stocks below have attracted the highest options volume -- in the front three-months' series -- during the past 10 trading days. Data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White.