Most Active Weekly Options: Barrick Gold Corporation and Freeport-McMoRan Inc

Weekly option traders have set their sights on Barrick Gold Corporation (USA) (NYSE:ABX) and Freeport-McMoRan Inc (NYSE:FCX)

Aug 31, 2015 at 12:02 PM
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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 commodity stocks Barrick Gold Corporation (USA) (NYSE:ABX) and Freeport-McMoRan Inc (NYSE:FCX).

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It's been a rough run for gold -- which notched a notable weekly deficit last week -- as uncertainty over the Fed's rate-hike timeline weighs on the malleable metal. This, in turn, has pressured gold miners, and ABX is no exception. The stock is off 5.8% today at $6.72 -- widening its month-to-date deficit to 37.5% -- and is within a chip-shot of its 25-year low of $6.51, tagged last Thursday.

​Nevertheless, option traders -- and analysts -- have taken the glass-half-full approach. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ABX's 10-day call/put volume ratio has jumped to 14.45 from 6.52 over the past two weeks. What's more, the current ratio ranks in the 94th annual percentile, meaning calls have been bought to open over puts at a near-annual-high clip.

Drilling down on the weekly 9/4 series -- which expires at this Friday's close -- peak call open interest is found at the 7.50 strike. According to the ISE, CBOE, and PHLX, the vast majority of positions have been bought to open here. Should Barrick Gold Corporation fail to be sitting north of the strike at expiration, the most the speculators stand to lose is the initial premium paid.

Outside of last week's bounce off 12-year lows -- thanks to a round of cost-cutting measures and Carl Icahn -- FCX has been a long-term laggard. Year-to-date, the stock has surrendered 55.4%, and more recently, has encountered a stern layer of resistance from its 40-day moving average.

Unlike ABX, though, put players have been flooding the equity's options pits. At the ISE, CBOE, and PHLX, for example, FCX's 10-day put/call volume ratio of 0.86 ranks in the 73rd percentile of its annual range. Plus, the stock's gamma-weighted Schaeffer's put/call open interest ratio (SOIR) rests at 1.26, meaning near-the-money put open interest outstrips call open interest among options expiring in three months or less.

Today, the stock's weekly 9/4 series is popular, accounting for half of FCX's 10 most active options. Receiving notable attention from option bears is the weekly 9/4 9.50-strike put, with all signs suggesting buy-to-open activity. In other words, speculators expect Freeport-McMoRan Inc to end the week south of $9.50.

 

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