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Most Active Weekly Options: American Airlines Group Inc (AAL)

Short-term option bulls are taking aim at American Airlines Group Inc

by 10/21/2014 11:22 AM
Stocks quoted in this article:

The 20 stocks listed in the table below are the S&P 500 Index (SPX) components that have attracted the highest weekly 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 American Airlines Group Inc (NASDAQ:AAL), which has seen a surge in options volume.

Most Active Weekly Options Table

Airline stocks are flying high today, and American Airlines Group Inc is no exception. Shares of the Texas-based transportation company have rallied nearly 7% to trade at $37.65, and year-to-date, they're up roughly 49%.

Options traders have taken notice. In fact, intraday volume is running at double what's expected at this point in the session, and calls are tripling puts, 51,000 contracts to 17,000. Among weekly AAL options, the 11/7 37-strike call is leading the way, with 3,448 contracts on the tape. The vast majority have crossed at the ask price, implied volatility is edging higher, and volume tops open interest -- collectively pointing to buy-to-open activity. This theory is reiterated by Trade-Alert.

Thanks to today's massive rally, the weekly AAL options are now in the money. However, for the buyers to profit at expiration, the shares need to muscle north of $38.69 -- the strike plus the volume-weighted average price of $1.69 -- by the close on Friday, Nov. 7, a time frame that encompasses the company's earnings report, slated for release this Thursday morning. Historically, American Airlines Group Inc (NYSE:AAL) hasn't ended a week above that mark since late August.


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Bulls Bet on a Breakout for bluebird bio Inc (BLUE)

bluebird bio Inc options traders loaded up on 40-strike calls

by 10/21/2014 10:52 AM
Stocks quoted in this article:

Biotech stock bluebird bio Inc (NASDAQ:BLUE) typically flies under the radar with options traders. On an average day, only 330 total puts and calls change hands on BLUE. However, the stock's call options saw a relative spike in interest yesterday, with 1,146 contracts exchanged during the course of the session.

The most active BLUE strike was the November 40 call, with 764 contracts crossing the tape. The majority of these front-month bets traded at the ask price, implied volatility at the strike rose 5.2 percentage points by the close, and 623 of these calls translated into new open interest overnight -- so it's safe to assume options traders were buying to open new bullish bets on BLUE yesterday.

Shares of bluebird bio Inc (NASDAQ:BLUE) have rallied nearly 80% year-to-date, including today's 2.4% gain, to trade at $37.69. By purchasing the November 40 calls, speculative players are betting on BLUE to break out above this looming round number over the next month. Back in mid-June, the stock tagged an all-time high of $41.75 -- but in the months since, BLUE's positive momentum has consistently fizzled around the $38-$40 neighborhood.


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Speculation Ramps Up on Troubled Vringo, Inc. (VRNG)

Vringo, Inc. options traders are eyeing a possible move above the $1 level

by 10/21/2014 10:25 AM
Stocks quoted in this article:

Call options were unusually active on Vringo, Inc. (NASDAQ:VRNG) on Monday, with 4,749 contracts crossing the tape -- representing nearly five times the stock's average daily call volume of 972. The most active strike was VRNG's January 2015 1-strike call, where 1,683 contracts were traded. Nearly 1,300 of those January 1 calls translated into new open interest overnight, and it appears most of those options were bought to open.

Traders who bought those VRNG January 1 calls are betting on the stock to rally above $1 per share over the next three months. The penny stock has shed roughly 68% of its value year-to-date, and is currently trading flat with Monday's close at $0.95.

Despite the stock's close proximity to proverbial support at zero, there are still plenty of short sellers looking for Vringo, Inc. (NASDAQ:VRNG) to deepen its decline. Short interest accounts for nearly 18% of the equity's float, or nine times VRNG's average daily trading volume. In light of this fact, it's possible that some of yesterday's call buyers were actually short sellers looking to hedge against a short-term rally.


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Pre-Earnings Traders Show Confidence In NQ Mobile Inc (ADR) (NQ)

NQ Mobile Inc (ADR) tends to make sharp moves following earnings

by 10/20/2014 2:12 PM
Stocks quoted in this article:

NQ Mobile Inc (ADR) (NYSE:NQ) is nearly 8% higher this afternoon to trade at $9.06, and options traders have responded. At last check, calls are changing hands at double the usual intraday pace, and puts are crossing at nine times what's expected .

Digging deeper, however, it appears many of the put traders aren't of the "vanilla" variety. Instead, at NQ's most active strike -- the deep out-of-the-money November 6 put, where roughly 2,500 contracts are on the tape -- speculators are selling to open contracts. This theory is underscored by data from Trade-Alert. In other words, these put writers are gambling on the equity to remain above $6 from now through the close on Friday, Nov. 21, when the newly front-month options expire.

On the charts, NQ has had a rough 2014, surrendering 38.5% of its value. In fact, the stock was below the aforementioned strike as recently as Sept. 23.

Turning to the future, NQ Mobile Inc (ADR) (NYSE:NQ) is scheduled to step up to the earnings mic sometime in mid-November. The shares tend to make big moves following these quarterly events (and in general, too). Over the past eight quarters, the stock has swung an average of 7.6% the day after reporting, including a 20.6% loss in April.


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Options Radar: Keurig Green Mountain Inc, Netflix, and Cirrus Logic

Reviewing notable options activity on Keurig Green Mountain Inc, Netflix, Inc., and Cirrus Logic, Inc.

by 10/20/2014 2:02 PM
Stocks quoted in this article:

Three stocks seeing notable options activity today are java giant Keurig Green Mountain Inc (NASDAQ:GMCR), streaming issue Netflix, Inc. (NASDAQ:NFLX), and integrated circuit specialist Cirrus Logic, Inc. (NASDAQ:CRUS). Here's a look at how today's options traders have been placing their bets on GMCR, NFLX, and CRUS.

  • GMCR is starting the week out with a bang -- up 3.4% to trade at $142.41. Today's positive price action is just more of the same for a stock that's tacked on more than 88% year-to-date, and more recently, outperformed the broader S&P 500 Index (SPX) by 19.7 percentage points over the past three months. In the options pits, though, put volume is trading at 1.5 times the typical intraday amount, and GMCR's 30-day at-the-money implied volatility has surged 11.6% to 46.3%, signaling elevated demand for short-term options. Drilling down, buy-to-open activity has been detected at Keurig Green Mountain Inc's weekly 10/31 132-strike put, as traders gamble on retreat for the shares through next Friday's close -- when the series expires.

  • Amid NFLX's steep 21% decline last week, the stock's 14-day Relative Strength Index (RSI) slid to 22 -- in oversold territory. This may explain why the security has bounced 1.5% today to trade at $362.63, or traders could just be cheering the company's newest collaboration. Regardless, option volume is running at a slightly accelerated pace, and all 10 of Netflix, Inc.'s most active options expire at this Friday's close. The equity's weekly 10/24 365-strike call has seen the most action, and is being bought to open for a volume-weighted average price (VWAP) of $7.08.

  • It could be a volatile two weeks for shares of CRUS. Specifically, Apple Inc. (NASDAQ:AAPL) -- from which Cirrus Logic, Inc. gets roughly 80% of its revenue -- will report earnings after tonight's close. Additionally, CRUS will take its own turn in earnings confessional after the close next Wednesday, Oct. 29. Over the past four quarters, the stock has averaged a single-session post-earnings loss of 4.1% -- including a nearly 14% plunge last October. Today, however, the equity is trading higher, and was last seen up 4.5% at $21.02. As such, call volume has soared to five times what's typically seen at this point in the day, and a number of speculators are betting on the security to extend today's positive price action through week's end. Specifically, speculators are buying to open CRUS' weekly 10/24 21-strike call for a VWAP of $0.39.

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