Most Active Options Update: Peabody Energy Corporation and Advanced Micro Devices, Inc.

Call buyers have been circling Peabody Energy Corporation (NYSE:BTU), while put buyers have honed in on Advanced Micro Devices, Inc. (NASDAQ:AMD)

Oct 1, 2015 at 2:32 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 are coal concern Peabody Energy Corporation (NYSE:BTU) and semiconductor specialist Advanced Micro Devices, Inc. (NASDAQ:AMD).


BTU -- which underwent a 1-for-15 reverse stock split earlier -- has seen accelerated call buying in recent weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, the equity's 10-day call/put volume ratio of 3.18 ranks in the 70th annual percentile.

Echoing this is the security's Schaeffer's put/call open interest ratio (SOIR) of 0.32, which sits lower than 98% of all comparable readings taken in the past year. In other words, short-term speculators have rarely been as call-heavy as they are now.

Technically speaking, BTU has been a letdown, shedding roughly 84% of its value year-to-date. Considering 36% of Peabody Energy Corporation's stock is sold short, a portion of the recent call buying could be a result of shorts hedging against any unexpected upside. They can breathe a sigh of relief today, with the security down 13% at $18, after Moody's said, "Spot coal prices remain weak across all US coal basins due to reduced consumption and low natural gas prices. Unless there is a recovery, miners' profitability will continue to decline as higher-priced contracts roll-off."

AMD has started October off on a positive note -- up 1.2% at $1.74. Longer term, though, the shares are off 35% year-to-date. What's more, history is not on AMD's side when it comes to October returns -- a trend option traders have been betting on in recent months.

In fact, at the ISE, CBOE, and PHLX, AMD's 50-day put/call volume ratio of 1.87 ranks higher than 71% of all similar readings taken in the past 52 weeks. Simply stated, puts have been bought to open relative to calls at a faster-than-usual clip. Even more telling is the equity's SOIR of 5.54 -- in the 80th annual percentile.

Drilling down on the front-month series, peak put open interest of 133,785 contracts is currently found at AMD's October 1 strike. For those buying to open the puts, the goal is for Advanced Micro Devices, Inc. to close in penny-stock territory on Friday, Oct. 16 -- when the options expire. The lowest the stock has ever traded is $1.61, which it panned on July 27.


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