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Options Radar: Whole Foods Market, Zynga, and Tesla Motors Inc (TSLA)

Reviewing notable options activity on Whole Foods Market, Inc., Zynga Inc, and Tesla Motors Inc

by 7/7/2014 1:26 PM
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Three names seeing notable option activity today are grocery concern Whole Foods Market, Inc. (NASDAQ:WFM), social gaming issue Zynga Inc (NASDAQ:ZNGA), and electric automaker Tesla Motors Inc (NASDAQ:TSLA). Here's a look at how today's option traders have been placing their bets on this trio.

  • Whole Foods Market, Inc. (NASDAQ:WFM) is 1.2% lower at $38.71, bringing its year-to-date deficit to more than 33%. The equity's short-term options are in demand, as its 30-day at-the-money (ATM) implied volatility (IV) hit a 52-week peak earlier, and was last seen 2.8% higher at 39.4%. Calls are outpacing puts by a margin of more than 3-to-1, with buy-to-open activity detected at the weekly 7/11 39.50-strike call -- the most active WFM option thus far. By purchasing the calls to open, the buyers expect WFM to rebound atop $39.50 by Friday's close, when the weekly options expire.

  • Zynga Inc (NASDAQ:ZNGA) is also following the broader equities market into the red, down 1.3% at $3.15. The security's 30-day ATM IV has popped 10.5% to 68.6%, and intraday put volume is running at a slightly accelerated clip compared to normal levels. Speculators seem to be gambling on a short-term floor at $3 for ZNGA, selling to open 3-strike puts in the July and August series of options. By writing the puts to open, the sellers expect ZNGA to remain north of $3 through the options' respective lifetimes, rendering the contracts worthless and allowing the sellers to retain the entire premium received at initiation.

  • Tesla Motors Inc (NASDAQ:TSLA) is 2.4% lower at $223.79, in the wake of reports of a serious Model S collision in Los Angeles. Option traders are clamoring for TSLA's short-term contracts, as the stock's 30-day ATM IV has rocketed 25% higher to 52.2%. Digging deeper, speculators are selling to open weekly options to gamble on TSLA's short-term trajectory. Specifically, it appears neutral-to-bearish traders are writing weekly 7/11 230-strike calls, amid expectations for TSLA to remain beneath $230 through Friday's close, while neutral-to-bullish bettors are gambling on a bottom at $220 by selling to open weekly 7/11 220-strike puts.


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