Options Check-Up: Baidu Inc, Cisco Systems, and Keurig Green Mountain

Analyzing recent option activity on BIDU, CSCO, and GMCR

by Griffin Kruse

Published on Dec 23, 2014 at 8:02 AM
Updated on Apr 20, 2015 at 5:32 PM

Among the stocks attracting attention from options traders lately are Chinese Internet search provider Baidu Inc (ADR) (NASDAQ:BIDU), tech titan Cisco Systems, Inc. (NASDAQ:CSCO), and java giant Keurig Green Mountain Inc (NASDAQ:GMCR). Below, we'll break down how option buyers are positioning themselves, and how much speculators are willing to pay for their bets on BIDU, CSCO, and GMCR.

  • BIDU has performed well in 2014, gaining nearly 32% year-to-date to trade at $234.60. More recently, BIDU has tacked on 2.34% since its Dec. 11 close at $229.23, after announcing a roughly $600 million stake in ride sharing app Uber earlier this month. However, bearish sentiment in the equity's options pits is growing. Baidu Inc's (ADR) 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.62 ranks higher than 85% of all similar readings taken over the past year. Meanwhile, the stock's near-term options are relatively cheap, per its Schaeffer's Volatility Index (SVI) of 31%, which is in the 18th annual percentile.

  • Shares of CSCO are also on the rise, adding nearly 26% year-to-date to perch at $28.22. What's more, the shares hit the $28.29 mark on Monday -- their loftiest perch since December 2007. Surprisingly, options traders are bearish on Cisco Systems, Inc., with the equity's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.91 resting in the 85th percentile of its annual range. Should CSCO continue its trek into multi-year-high territory, an unwinding of pessimism in CSCO's option pits could send the shares even higher. Nonetheless, the security's short-term options are inexpensive, on a volatility basis, per its SVI of 17%, which ranks in the 24th percentile of its 52-week range.

  • GMCR has had a monster year, increasing roughly 85% in value to linger near $140. Since topping out at a record peak of $158.87 on Nov. 18, the equity has been in consolidation mode, and has lost nearly 11%. However, speculators have been betting on a quick turnaround, per the equity's 10-day ISE/CBOE/PHLX call/put volume ratio of 1.54, which ranks above 81% of all other such readings taken over the past year. Keurig Green Mountain Inc's short-term options are available at near-bottom-of-the-barrel prices, relatively speaking, as its SVI of 30% ranks in the 8th percentile of its yearly range. Furthermore, the stock's Schaeffer's Volatility Scorecard (SVS) of 97 indicates the shares have tended to make outsized moves over the past year, relative to what the options market has priced in. Ahead of the bell, GMCR is pointed 1% lower as traders digest news of a recall of the company's MINI Plus Brewing System units.

A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


Look Who's Going Bankrupt Next in America
Porter Stansberry is making a concerning prediction.
First Week in April Provides More Coronavirus-Related Volatility
A slew of coronavirus-related news sent markets on another weekly roller coaster ride
Netflix Stock Heading into Historically Bullish Quarter
NFLX's 10-day moving average has stepped up as support lately
Look Who's Going Bankrupt Next in America
Porter Stansberry is making a concerning prediction.