Most Active Options: Tesla Motors Inc and Chesapeake Energy Corporation

Option traders have been flocking to Tesla Motors Inc (NASDAQ:TSLA) and Chesapeake Energy Corporation (NYSE:CHK)

by Andrea Kramer

Published on Jul 27, 2015 at 2:38 PM
Updated on Jun 24, 2020 at 10:16 AM

The 20 stocks listed in the table below 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 are electric vehicle maker Tesla Motors Inc (NASDAQ:TSLA) and oil-and-gas concern Chesapeake Energy Corporation (NYSE:CHK).

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TSLA has grown increasingly popular among call buyers. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock has racked up a 10-day call/put volume ratio of 1.46. This ratio stands higher than 90% of all other readings from the past year, suggesting buyers have picked up up TSLA calls over puts at a much faster-than-usual clip during the past two weeks.

Most popular have been the weekly 7/31 290-strike call and the weekly 8/7 300-strike call, which saw the biggest open interest increases over the last 10 sessions. Assuming the buyers are "vanilla" bulls, their goal is for TSLA to surmount the deep out-of-the-money (OOTM) strikes by the calls' respective expiration dates of Friday, July 31, and Friday, Aug. 7 -- the latter of which encompasses the company's turn in the earnings spotlight the night of Wednesday, Aug. 5.

However, it's worth noting that short interest represents more than 24% of TSLA's total available float. At TSLA's average pace of trading, it would take more than six sessions to repurchase these pessimistic positions. Against this backdrop, it's possible that the growing appetite for OOTM calls could be attributable to shorts looking for a short-term hedge.

At last check, Tesla Motors Inc (NASDAQ:TSLA) has succumbed to broad-market headwinds, with the shares down 5.1% at $251.99. What's more, the stock is on pace to end beneath its 10-week moving average for the first time since early April.

CHK, meanwhile, has been a popular target of option bears. The security's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.90 registers in the 92nd percentile of its annual range, implying that option buyers have picked up puts over calls at a rapid-fire rate during the past couple of weeks.

Echoing this, CHK's Schaeffer's put/call open interest ratio (SOIR) of 2.07 indicates that puts more than double calls among options slated to expire within three months. Plus, this ratio ranks in the 94th percentile of its annual range, suggesting near-term traders have rarely been more put-biased during the past year.

While TSLA traders have shown interest in short-term bets, CHK traders are thinking long term. The equity's January 2016 7- and 8-strike puts have seen the biggest open interest increases over the last two weeks. By purchasing the January-dated options to open, the buyers expect CHK to extend its recent string of new lows throughout the next few months. 

Short sellers, meanwhile, have also ravaged CHK. Short interest spiked 19.8% during the past two reporting periods, and now accounts for nearly 30% of the stock's total available float. 

Technically speaking, it's no surprise to find Chesapeake Energy Corporation (NYSE:CHK) plagued by pessimism. The shares have gone the way of oil, plummeting more than 70% since eyeing the $30 region last summer. In fact, CHK touched a fresh decade-plus low of $8.11 earlier, but was last seen 2.6% higher at $8.50, thanks to an upgrade to "buy" from "neutral" and a price-target hike to $15 from $14 at SunTrust Robinson. Of course, CHK may have been due for a short-term bounce, as the stock's 14-day Relative Strength Index (RSI) sits at 24 -- in oversold territory.

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