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 Bank of America Corp (NYSE:BAC - 11.24), Cisco Systems, Inc. (NASDAQ:CSCO - 20.69), and Intel Corporation (NASDAQ:INTC - 21.17). Here is a quick look at today's interesting option activity in these options pits.
BAC speculators are keeping their bullish hopes alive and have extended their long calls to a later series. Specifically, two large blocks of the February 12 calls traded at the bid price this morning while two other blocks of the March 12 call traded at the ask price. In total, almost 19,000 of the front-month positions changed hands for $0.05 each, and 10,000 of the March calls traded for $0.21 each. This is likely the work of a bullish speculator extending his outlook by one month. Breakeven at March expiration on this new trade is $12.21 (strike plus premium paid), or 8.6% above current levels. Calls have been increasingly popular in BAC of late; the 10-day the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio has reached 3.54, which is higher than 79% of the past year's worth of readings.
On CSCO, a block of 4,050 call contracts traded on the February 21 call and crossed at the ask price of $0.52. Implied volatility has ticked slightly higher, suggesting the positions may have been bought to open. This would suggest the belief that CSCO will move higher during the next couple of weeks -- breakeven at expiration for this trade would be $21.52. Prior to February options expiration, though, is the company's earnings report, expected after the close on Feb. 13.
Finally, INTC is seeing some action at its March 19 put, where almost 5,400 contracts have changed hands, all at the ask price. Data from the ISE suggests at least some of these are being purchased to open by bearish speculators hoping for a dip in the shares during the next several weeks. The volume-weighted average price (VWAP) for this put is $0.09, making the breakeven price (at expiration) $18.91 (strike minus the VWAP). This is a relatively aggressive bearish play, as it requires INTC to fall more than 10.5% by the close on March 15, when these options expire. In fact, the delta on this option is below negative 10, meaning it has a less than 1-in-10 chance of being in the money at expiration.
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.