Stocks quoted in this article:
Three stocks seeing notable options activity today are slot machine maker Scientific Games Corp (NASDAQ:SGMS), tech concern Tableau Software Inc (NYSE:DATA), and biopharmaceutical firm Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN). Here's a look at how today's options traders have been placing their bets on SGMS, DATA, and ACHN.
- SGMS is up 4.3% to trade at $8.92 in the wake of some acquisition news, and speculators are flooding the equity's options pits. At last check, overall volume was trading at 38 times the average intraday rate, and per the stock's 30-day at-the-money (ATM) implied volatility (IV) -- which is at a new annual high of 90.1% -- short-term options are in demand. Drilling down, new positions are being initiated at Scientific Games Corp's front-month August 7.50 and 12.50 puts.
- DATA, meanwhile, is down 6% to $61.11, despite last night's stronger-than-expected second-quarter earnings results being met with no fewer than four price-target hikes and one upgrade. On the heels of this scheduled announcement, the stock's 30-day ATM IV has plunged 13.3% to 52.3% -- in the middling 58th percentile of its annual range. Option traders are betting on more downside over the next two weeks, with buy-to-open activity detected at Tableau Software Inc's August 59 put.
- ACHN is tentatively scheduled to report earnings next week, and ahead of the event, option traders are piling up on calls. Today, call volume is running at six times what's typically seen at this point in the day, and amid this accelerated demand, the stock's 30-day ATM IV has soared 26.6% to 126.3% -- in the 95th annual percentile. Traders are buying to open the equity's August 8 calls for a volume-weighted average price (VWAP) of $0.43, making at-expiration breakeven $8.43 (strike plus VWAP). Profit will accumulate north of here, while losses are capped at 100% of the premium paid, should the equity settle south of the strike at the close on Friday, Aug. 15, when front-month options expire. On the charts, Achillion Pharmaceuticals, Inc. is up 1% this afternoon to linger near $6.92. Longer-term, the shares have more than doubled in 2014.