Most Active Weekly Options: American Airlines Group Inc. and Yahoo! Inc.

Short-term options traders are targeting American Airlines Group Inc (AAL) and Yahoo! Inc. (YHOO)

by Alex Eppstein

Published on Mar 17, 2015 at 11:50 AM
Updated on Apr 20, 2015 at 5:32 PM

The 20 stocks listed in the table below have attracted the highest total 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. Two names of notable interest are transportation issue American Airlines Group Inc (NASDAQ:AAL) and online media maven Yahoo! Inc. (NASDAQ:YHOO).

Most Active Weekly Options Table

American Airlines Group Inc (NASDAQ:AAL) is nearly 6% higher at $53.12, following news it will replace Allergan, Inc. (NYSE:AGN) -- which was recently bought by Actavis plc (NYSE:ACT) -- on the S&P 500 Index (SPX) at Friday's close. However, from a longer-term perspective, the shares of AAL remain in negative territory on a year-to-date basis, and could run into a familiar roadblock in the $54 region.

While weekly options have been popular of late, traders today are honing in on front-month contracts. According to data from Trade-Alert, it looks like traders are selling to close their now in-the-money March 50 calls, locking in paper profits ahead of Friday night's expiration. However, more ambitious bullish bettors may be buying to open AAL's March 55 call, anticipating additional end-of-week upside.

By no means is optimism limited to the stock's options pits. Nine of 11 analysts have given AAL a "buy" or better recommendation, compared to two "holds" and not a single "sell." What's more, the average 12-month price target of $68.97 stands in yet-to-be-attained territory, and represents a 30% premium to current trading levels. Should American Airlines Group Inc run into resistance at its year-to-date breakeven mark, a move lower could prompt a round of downgrades and/or price-target reductions.

Optimism is flowing toward Yahoo! Inc. (NASDAQ:YHOO) today, too, with calls crossing at 1.8 times the usual rate for this point in the session. Also, potential buy-to-open activity is detected at the near-the-money March 44 call, as traders anticipate the equity will take out $44 by week's end, when front-month options expire.

Technically, however, YHOO has struggled. Despite being up 0.6% this morning at $43.76, the shares are sitting on a year-to-date deficit of more than 13%. What's more, the stock appears to be on a collision course with its descending 40-day trendline, which rejected a late-January rally.

Despite these weak technicals, Yahoo! Inc. remains on the bullish radar of the brokerage bunch, with 72% of covering analysts doling out "buy" or better recommendations. Additionally, the stock's consensus 12-month price target of $57.84 hasn't been toppled since September 2000. Should YHOO continue to struggle, negative analyst notes could ensue, potentially resulting in headwinds.

Daily Chart of YHOO since January 2015 with 40-Day Moving Average


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