Stocks quoted in this article:
Of the 20 equities with the heaviest options volume in recent sessions, three names of notable interest this afternoon are Intel Corporation (NASDAQ:INTC - 21.09), General Electric Company (NYSE:GE - 21.19), and Las Vegas Sands Corp. (NYSE:LVS - 50.98). Here is a quick look at today's interesting option activity in these options pits.
Although INTC has gained 9.7% from its annual low of $19.23 reached on Nov. 21, some speculators are not convinced this upward momentum is sustainable. The January 2013 20-strike put is notably active today, with 20,700 contracts trading in several large and mid-sized blocks. Nearly all of this volume has traded at the ask price, and implied volatility has inched higher, suggesting some of the puts are being purchased to open. Breakeven at expiration -- given the volume-weighted average price (VWAP) of $0.12 -- is $19.88, or the strike price less the premium paid. Today's activity is contrary to recent trends at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). In the past 50 days, option traders have bought to open twice as many calls as puts, and the resultant call/put volume ratio of 2.00 is higher than 79% of the past year's readings. In other words, call buying has been elevated of late, in correlation with the stock's move off of new lows.
Bearish speculators are also interested in GE today, and are focused on the 1/11 20.5-strike put. More than 2,600 contracts have traded on this weekly option, 99% of which changed hands at the ask price, suggesting buyers. Breakeven at expiration is $20.44 (strike less VWAP of $0.06), which is 3.5% below current levels. Based on the delta for this option, today's put buyers have an 18% chance of being in the money by the time expiration rolls around at next Friday's close.
Meanwhile, data from the ISE indicates some option players are buying to open LVS options, most notably the February 50 calls. Nearly 6,000 contracts have traded at this near-the-money strike, with more than two-thirds going off at the ask price. Breakeven is 3.4% above the stock's current price, at $52.69 (strike price plus VWAP paid). Schaeffer's Volatility Scorecard (SVS) reading of 91 suggests LVS options are richly priced of late, relative to a significant move on the charts.
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.