Options Check-Up: GameStop, QUALCOMM, Tesla Motors

Analyzing recent option activity on GME, QCOM, and TSLA

Digital Content Group
Nov 19, 2014 at 7:55 AM
facebook X logo linkedin

Among the stocks attracting attention from options traders lately are video game retailer GameStop Corp. (NYSE:GME), communications giant QUALCOMM, Inc. (NASDAQ:QCOM), and electric automaker Tesla Motors Inc (NASDAQ:TSLA). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on GME, QCOM, and TSLA.

  • GME moved little yesterday, giving back just 8 cents to close at $44.02. In recent weeks, the shares have made a strong move up the charts, jumping 23% since their mid-October low of $35.82. Nevertheless, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open more than two puts for every call on GameStop Corp. during the past two weeks. The resultant 10-day put/call volume ratio of 2.28 registers in the 78th percentile of its annual range, suggesting a healthier-than-usual appetite for bearish bets over bullish. Meanwhile, short-term GME options can be had for a slightly below-average price right now, as the stock's Schaeffer's Volatility Index (SVI) of 58% sits below three-fifths of all readings taken in the last 12 months. This, despite the fact the company's third-quarter earnings report is just around the corner, after the close tomorrow.

  • QCOM added 2.3% yesterday to land at $72.01, and today, the firm will host its annual analyst meeting. It's been an uneventful year for the shares, which are down 3% since the beginning of 2014. More recently, QUALCOMM, Inc. has underperformed the broader S&P 500 Index (SPX) by about 10 percentage points over the previous three months. Nonetheless, the stock's 50-day ISE/CBOE/PHLX call/put volume ratio of 2.89 stands just 4 percentage points from an annual high -- suggesting traders are more optimistic than usual toward the shares. However, those hoping to place short-term bets on QCOM should be careful, as the equity's Schaeffer's Volatility Scorecard (SVS) checks in at 16. In other words, the options market has tended to price in more volatility over the past 12 months than QCOM has deserved, based on its actual moves on the charts.

  • Finally, TSLA tacked on 1.5% Tuesday to finish at $257.70, and is now up 71.3% on a year-to-date basis. Nevertheless, recent options speculators have been buying to open puts over calls at a faster-than-usual pace, per Tesla Motors Inc's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.91 -- which ranks in the 72nd percentile of its 12-month range. (Though some of these bearish bets may have been initiated by shareholders hedging against potential downside in the stock.) Regardless of their motives, traders can pick up short-term TSLA options at a relative bargain right now. The stock's SVI of 34% is lower than 92% of all readings from the previous 52 weeks.

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI