Most Active Options Update: Peabody Energy Corporation and Denbury Resources Inc.

Two mid-cap stocks attracting the attention of put players lately are Peabody Energy Corporation (NYSE:BTU) and Denbury Resources Inc. (NYSE:DNR)

Aug 17, 2015 at 1:22 PM
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The 20 stocks listed in the table below are the S&P 400 MidCap Index (MID) components that 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 lately are Peabody Energy Corporation (NYSE:BTU) and Denbury Resources Inc. (NYSE:DNR).

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Skepticism has been ramping up on BTU of late. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for example, the stock's 10-day put/call volume ratio has jumped to 1.16 from 0.50 over the past two weeks. Also, the current reading ranks in the top quartile of its annual range.

This put-skewed trend is continuing today, with puts outpacing calls by a more than 3-to-1 ratio. The majority of the day's action has centered on BTU's August 1.50 put, which is seeing a mix of buying and selling activity. Drilling down, this front-month strike -- which expires at this Friday's close -- has been popular among option traders, with 12,293 contracts currently in residence.

Technically speaking, Peabody Energy Corporation (NYSE:BTU) has been a long-term laggard -- down more than 84% year-to-date. Today, however, the stock is up 6.2% at $1.20, on what is more than likely a dead-cat bounce.

Put players have also been active in DNR's options pits. In fact, at the ISE, CBOE, and PHLX, the security's 10-day put/call volume ratio of 1.77 ranks in the 90th annual percentile. Simply stated, puts have been bought to open over calls with more rapidity just 10% of the time within the past year.

This pessimism has spilled outside of the options arena, as well. Specifically, 9.8% of the equity's float is sold short. Plus, 12 out of 13 analysts rate DNR a "hold" or "strong sell." However, the average 12-month price target of $7.10 stands at an 85% premium to current trading levels, so there's still room for price-target cuts.

On the charts, shares of the oil-and-gas explorer have struggled right along with crude. In 2015 alone, Denbury Resources Inc. (NYSE:DNR) has surrendered more than half its value -- and hit a 13-year low of $3.04 as recently as Aug. 6 -- to churn near $3.83.

 

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