Stocks quoted in this article:
The 20 stocks listed in the table below have attracted the highest total options volume during the past 10 trading days. Names highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. One name of notable interest today is Microsoft Corporation (NASDAQ:MSFT), which has seen a mix of call selling and buying.
Microsoft Corporation is up slightly this morning at $46.77, but earlier managed to touch a new 14-year high of $47.19. The technical milestone has call players buzzing, as the contracts are changing hands at more than quadruple the typical intraday rate. Short-term strikes are in demand, per the stock's 30-day at-the-money implied volatility (IV), which as popped 4.6% to 15.3%.
Diving into the details, MSFT's most active option is the near-the-money September 47 call, where close to 20,000 contracts are on the tape. A considerable portion of the contracts have crossed at the bid price, and data from the International Securities Exchange (ISE) points to some sell-to-close activity. In short, it appears that option bulls are unwinding their bets ahead of tonight's expiration.
Slightly longer-term traders are targeting MSFT's weekly 10/10 48-strike call. Over 90% have been exchanged at the ask price, IV is edging higher, and the ISE confirms newly bought bullish bets. By purchasing these out-of-the-money calls at a volume-weighted average price (VWAP) of $0.31, the speculators are gambling on the shares toppling $48.31 (strike plus VWAP) at the close on Friday, Oct. 10 -- when the weekly contracts expire. Gains are theoretically unlimited north of there, while potential losses are limited to the initial cash layout, should the equity settle south of $48 three weeks from today.
In fundamental news, Microsoft Corporation (NASDAQ:MSFT) announced late Thursday it will lay off 2,100 employees, and will shutter its Silicon Valley research-and-development center. The moves are not unexpected, as CEO Satya Nadella previously outlined plans to cut 14% of MSFT's global workforce, or about 18,000 positions.