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Options Radar: Amazon.com, Intel Corporation, and Facebook Inc (FB)

Reviewing notable options activity on Amazon.com, Inc., Intel Corporation, and Facebook Inc

by 7/11/2014 10:56 AM
Stocks quoted in this article:

Three names seeing notable option activity out of the gate today are e-commerce titan Amazon.com, Inc. (NASDAQ:AMZN), tech concern Intel Corporation (NASDAQ:INTC), and social networking bigwig Facebook Inc (NASDAQ:FB). Here's a look at how today's option traders have been placing their bets on these three names.

  • Amazon.com, Inc. (NASDAQ:AMZN) has jumped 4.1% to $341.49, after the firm asked the Federal Aviation Administration (FAA) for permission to deliver packages via unmanned drones in Seattle. Against this backdrop, intraday options volume is running at five times the average rate, with last-minute option traders coming out of the woodwork. In fact, eight of the 10 most active AMZN options expire at the closing bell, and volume has surpassed open interest at all of the weekly strikes, confirming fresh initiations. Furthermore, the stock's 30-day at-the-money implied volatility has popped 7.1% to 37.9%, underscoring the escalating demand for short-term contracts. Digging deeper, traders are selling to open the weekly 7/11 335-strike put, amid hopes for AMZN to remain north of the strike through today's close. More "vanilla" bulls are buying to open the weekly 7/11 340-strike call, on expectations for the stock to extend its journey north of $340 this afternoon.

  • Intel Corporation (NASDAQ:INTC) notched a decade-plus high of $31.45 in early action, but has since pulled back 0.4% to flirt with $31.13. Meanwhile, INTC put volume is trading at a faster-than-usual clip this morning, though nearly half of the action looks like neutral-to-bullish betting ahead of earnings next Wednesday, July 16. Specifically, it appears traders are selling to open the August 30 put, amid hopes for INTC to remain atop the round-number mark through the close on Friday, Aug. 15, when back-month options expire. In this best-case scenario, the puts will expire worthless, and the sellers can pocket the initial credit received. Losses, on the other hand, will mount if INTC breaches the strike within the option's lifetime. Historically, Intel has matched or surpassed Wall Street's per-share profit projections in six of the past eight quarters.

  • Finally, Facebook Inc (NASDAQ:FB) is 1.9% higher at $66.07, and option players are scrambling to place bets on the stock's end-of-day trajectory. Overall options volume is running at nearly twice the typical rate, with both bulls and bears showing an affinity for the weekly 7/11 65 strike. The call buyers expect FB to extend its journey north of $65 through today's close, while the put buyers are betting on a retreat for the shares. Longer-term bulls are buying to open the August 75 call, likely on expectations for a post-earnings rally to record highs for FB. The company will step into the earnings confessional after the close on Wednesday, July 23, and has matched or exceeded analysts' consensus bottom-line estimates in seven of the past eight quarters. What's more, FB averages a one-day post-earnings surge of 7.2%.

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