Most Active Options: Tesla Motors Inc and Facebook Inc

Weekly option traders have been placing bets on Tesla Motors Inc (TSLA) and Facebook Inc (FB) ahead of earnings

Nov 3, 2015 at 1:39 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 notable names are electric automaker Tesla Motors Inc (NASDAQ:TSLA) and social network Facebook Inc (NASDAQ:FB), both on deck to report earnings.

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TSLA is scheduled to report quarterly results after the close tonight, and based on near-term at-the-money (ATM) straddle data, the options market is pricing in an 8.8% post-event move. This is considerably bigger than the stock's average post-event swing of 7.4%, in the session following the company's eight prior turns in the confessional.

Ahead of earnings, traders have been betting bullishly on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, the stock's 10-day call/put volume ratio of 1.15 ranks near the top quartile of its annual range. In today's trading, though, puts outstrip calls, and weekly puts expiring at Friday's close account for seven of the 10 most active strikes. Leading the way is the weekly 11/6 175-strike put, which appears to be seeing some sell-to-open action.

Technically speaking, Tesla Motors Inc has been struggling since its most recent high of $271.57 in late September. Since then, the stock has lost 22% and now hovers near $211.45 -- just above its 10-day moving average.

FB has been considerably more successful on the charts, boasting a 32% year-to-date lead to sit at $103.11. In fact, the shares topped out at a record $105.12 last week, and have outperformed the broader S&P 500 Index (SPX) by almost 10 percentage points during the past three months.

Amid these impressive gains, option bettors have been wagering on additional upside, per the stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 2.95. Not only does this ratio indicate traders have bought to open roughly triple the number of calls as puts over the past two weeks, it also ranks in the high 88th percentile of its annual range. In today's action, weekly calls account for four of the top five strikes, with a possible mix of buy- and sell-to-open activity at the at-the-money weekly 11/6 103-strike call.

In terms of earnings, Facebook Inc will step up to the plate tomorrow night. While the stock has averaged a single-day post-earnings move of 4.4% after the company's last eight reports, the options market is pricing in a bolder 5.7% swing, based on the equity's near-term ATM straddle.

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