Most Active Options Update: Caterpillar Inc. and Netflix, Inc.

Options traders are targeting Caterpillar Inc. (CAT) and Netflix, Inc. (NFLX)

by Alex Eppstein

Published on Aug 13, 2015 at 11:19 AM
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 blue chip Caterpillar Inc. (NYSE:CAT) and streaming entertainment provider Netflix, Inc. (NASDAQ:NFLX).

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CAT puts have been very popular across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) in recent months. Specifically, the stock's 50-day put/call volume ratio is 1.75, with long puts nearly doubling calls. What's more, this ratio ranks in the 82nd percentile of its annual range, suggesting traders have preferred bearish bets over bullish at an accelerated clip.

Unlike what we saw earlier this week, CAT puts are running at four times the intraday norm, and 10 times the rate of calls. According to Trade-Alert, one speculator is initiating an in-the-money put spread, possibly buying to open 15,000 contracts at the October 85 strike, and selling to open 15,000 at the November 85 strike.

On the charts, Caterpillar Inc. is a long-term dud, and has faced pressure from its 20-day moving average since late June. The stock's 1% dip today to trade at $78.11 brings its year-to-date deficit close to 15% -- helping us make sense of the aforementioned bias toward puts over calls.

On the other hand, NFLX calls have been flying off the shelves at the ISE, CBOE, and PHLX. During the last two weeks, the stock has amassed a call/put volume ratio of 1.32 -- above 94% of comparable readings from the past year.

Today, extremely short-term speculators are active, with the weekly 8/14 series accounting for nine of the 10 most active strikes. In the lead is the weekly 8/14 120-strike put -- where it appears long positions are being initiated -- followed by the weekly 8/14 120- and 121-strike calls, where sell-to-open activity is likely transpiring.

Technically speaking, Netflix, Inc. is a marvel, increasing nearly 150% year-to-date to hover near $121. In fact, the stock last week hit an all-time peak of $129.29, and has outperformed the broader S&P 500 Index (SPX) by almost 40 percentage points over the last 60 days.

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