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Most Active Options Update: Citigroup, Ford Motor, and Pfizer

C, F, and PFE are seeing notable options activity today

by 11/14/2012 1:58 PM
Stocks quoted in this article:

Among the 20 equities seeing the most attention among options traders of late, three names catching our eye today are Citigroup Inc. (NYSE:C - 35.90), Ford Motor (NYSE:F - 10.86), and Pfizer Inc. (NYSE:PFE - 23.91). Here is a brief look at some interesting option activity in these options pits this afternoon.

C traders are projecting limited movement in the shares for the next few days; data from the International Securities Exchange (ISE) indicates calls are being sold to open at the November 37 strike. These slightly out-of-the-money calls are trading at an average price of $0.11 per contract. Call sellers will keep this modest premium after expiration, assuming C is still trading south of the $37 level when the positions expire. This could be part of a covered call strategy on the part of shareholders looking to augment their return on investment.

Traders may be taking risk off the table in F, as the November 11 puts are seeing some selling activity ahead of expiration. This is the most-active Ford option today, with more than 5,900 contracts trading on open interest of 22,000. The majority of options volume on the ISE was bought to close, suggesting these were initially sold to open. F has dipped roughly 1.3% today, putting these puts in the money and the put sellers on the hook to acquire the shares, should they be holding the contracts at expiration.

Finally, speculators are closing out a major downside bet in PFE. The December 25 put saw a block of 20,000 contracts trade off the bid price of $1.13 per contract today. On Oct. 2, according to Trade-Alert, a block of 20,000 traded at the ask price of $0.65. During this time frame, PFE has dropped from $25.12 to $23.91, allowing these put buyers to net a nice profit of $0.48 each, or $960,000 for the block of 20,000 contracts.

The 20 stocks below have attracted the highest options volume -- in the front three-months' series -- during the past 10 trading days. Data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White.

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