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Short-term options traders are targeting J C Penney Company Inc (JCP) and Twitter Inc (TWTR)
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 retailer J C Penney Company Inc (NYSE:JCP) and microblogging platform Twitter Inc (NYSE:TWTR).
Last week's headline trade on JCP consisted of a massive block of 10,000 February 9 puts. While puts are again the options of choice today, it's the weekly January 2015 8 strike that's in the crosshairs. Roughly 3,100 contracts are on the tape here, and it looks like some of this is buy-to-open activity, as short-term traders bank on additional downside through week's end, when the front-month options expire.
J C Penney Company Inc has been on a technical tear of late -- outperforming the broader S&P 500 Index (SPX) by 26.3 percentage points in the last month -- though the shares are down 3.3% at $7.88 this afternoon. During the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have responded by buying to open calls over puts. JCP's 10-day call/put volume ratio across these exchanges is 5.48 -- just 3 percentage points from an annual peak. However, with more than one-third of the security's float sold short -- or 8.3 times the usual daily trading volume -- some of these calls may have been initiated by short sellers seeking an upside hedge.
TWTR has seen a similar rush of bullish betting, per its 50-day ISE/CBOE/PHLX call/put volume ratio of 2.64 -- in the 95th percentile of its 12-month range. Along those lines, the January 2015 38.50-strike and weekly 1/23 40-strike calls are both seeing buy-to-open activity this afternoon.
Technically, however, Twitter Inc has been a mess. The stock is off 5.8% today to trade at $37.53, bringing its year-over-year deficit to 38%.