Most Active Options Update: 3D Systems Corporation and J.C. Penney Company, Inc.

Short-term traders are targeting 3D Systems Corporation (DDD) and J C Penney Company Inc (JCP)

by Alex Eppstein

Published on Mar 30, 2015 at 2:46 PM
Updated on Apr 20, 2015 at 5:32 PM

The 20 stocks listed in the table below are the S&P 400 MidCap Index (MID) components that have attracted the highest total 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 today are 3-D printing specialist 3D Systems Corporation (NYSE:DDD) and department store operator J C Penney Company Inc (NYSE:JCP).

Most Active Options Table

DDD has been a technical laggard for some time. This afternoon, the shares are down 1.3% at $26.98, bringing their year-to-date deficit close to 18%. Also, the stock isn't too far from its two-year low of $26.29, touched in mid-March.

Despite this bleak technical picture, traders have been setting their sights on DDD calls over puts in recent weeks. The equity's 10-day call/put volume ratio across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 4.71 -- just 2 percentage points from a 12-month peak. Echoing this, DDD's Schaeffer's put/call open interest ratio (SOIR) of 1.00 sits below 82% of comparable readings from the previous year, indicating short-term speculators have rarely been as call-focused.

This is the case today, with calls crossing at roughly triple the rate of puts. In fact, it looks like some speculators are buying to open DDD's weekly 4/2 28-strike call, in the hopes the equity will muscle atop $28 by Thursday's close, when the weekly series expires.

However, it's worth noting that 36.7% of DDD's float is sold short, which represents nearly four weeks of trading, at typical volumes. In other words, shorts may be purchasing calls -- especially at out-of-the-money strikes -- to hedge their bearish positions in the event of an unexpected rally.

On the other side of the ledger, JCP has seen accelerated put buying of late. The security's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.54 outstrips 99% of comparable readings from the past year. Today, however, buy-to-open activity is detected at the stock's weekly 4/2 and 4/10 8-strike calls, as option players roll the dice on the underlying muscling atop $8 by the respective expiration dates.

Elsewhere on the Street, the analyst community is skeptical of JCP. Fourteen of 16 brokerage firms have handed the shares a "hold" or worse rating, and the equity's average 12-month price target of $8.15 is less than 6% higher than the current price.

Today, JCP is sitting about 1% above the flatline, bringing its year-to-date gain to roughly 19%. In fact, over the previous 60 sessions, the shares have outperformed the broader S&P 500 Index (SPX) by 17.6 percentage points -- potentially setting them up for some positive analyst attention.


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