MasterCard Incorporated (MA), Visa Inc. (V) Call Volume Peaks on China News

China's government opened a $6.84 trillion market for Mastercard Inc (NYSE:MA) and Visa Inc (NYSE:V)

by Josh Selway

Published on Apr 22, 2015 at 2:06 PM
Updated on Jun 24, 2020 at 10:16 AM

Thanks to a move by the Chinese government that will open up the bank card clearing market in the country, Mastercard Inc (NYSE:MA) and Visa Inc (NYSE:V) are both booming today. The companies will now have access to a market that, according to Reuters, was worth $6.84 trillion last year. Now, call volume is skyrocketing in each stock's options pits.

Starting with MA, calls are changing hands at 10 times the typical intraday pace, and the equity has already seen more call volume today than any other day in the past year. One of the most popular contracts is the weekly 4/24 91-strike call, which it looks like traders are buying to open, hoping for the shares to extend gains above $91 by the time the options expire at the close this Friday.

From a broader perspective, MA's options traders are unusually call-skewed, at least when it comes to contracts expiring in the next three months. The stock's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.76, lower than 89% of all readings from the past year.

Like MA, V's near-term option traders are more call-skewed than normal. The stock's SOIR of 0.79 ranks in the 18th annual percentile.

V's intraday call volume is also at an annual high, as nearly 70,000 contracts have crossed -- eight times what's expected at this point in the session. Not all of these are necessarily of the bullish variety, though. The security's most active contract is the weekly 4/24 67.50-strike call, and it appears some speculators may be selling to open the contract. These potential option writers are expecting the underlying to move back below $67.50 by week's end.

At last check, Mastercard Inc (NYSE:MA) stood 4.5% higher at $91.74. Similarly, Visa Inc (NYSE:V) has added 4.8% to trade at $68.49 -- and earlier hit an all-time high of $69.98.


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