Most Active Options: Exxon Mobil Corporation and JetBlue Airways Corporation

XOM and JBLU have attracted option traders amid oil's decline

by Andrea Kramer

Published on Dec 7, 2015 at 1:50 PM
Updated on Dec 7, 2015 at 1:54 PM

The 20 stocks in the table directly below have attracted the highest total options volume during the past 10 trading days. The subsequent chart shows the 20 mid-cap stocks most heavily traded by option players in the same time frame. 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 big-cap energy issue Exxon Mobil Corporation (NYSE:XOM) and airline JetBlue Airways Corporation (NASDAQ:JBLU).

151207MAO_ALL

151207MAO_MID2

XOM has shed 3% to sit at $76.53, leading the Dow into the red. Energy stocks are the worst performers on the day, as crude oil skids to new lows. XOM has already dropped more than 17% in 2015, with rebound attempts cut short by its declining 10-month moving average.

Nevertheless, XOM calls have been flying off the shelves at a rapid-fire rate, which typically signals bullish activity. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity has racked up a 10-day call/put volume ratio of 1.85. This ratio stands higher than 89% of all others from the past year, underscoring a healthier-than-usual appetite for long calls over puts.

The out-of-the-money December 85 call has seen more than 26,000 positions added during the past two weeks -- the second most of any strike. Most of that action transpired on November 20, with a big block bought to open. This call bias on Exxon Mobil Corporation is continuing today, with the contracts trading at twice the average intraday pace. 

Unlike Big Oil, JBLU -- along with most of its airline peers -- is getting a lift from sliding crude prices. The shares were last seen 4.1% higher at $26.52, less than a point from their mid-September 12-year peak of $27.36. Also, for the past two months, the shares have edged upward atop their rising 80-day moving average. 

In the options pits, traders have taken an unusually bearish tone. JBLU's 50-day put/call volume ratio at the ISE, CBOE, and PHLX sits at 0.26 -- only 2 percentage points from a 12-month high. 

Traders have been displaying their skepticism in other ways, as well. The option seeing the biggest open interest change over the past 10 days is the January 2016 29-strike call, where over 5,200 positions have been added -- over four times as many as the next closest strike. Yet data indicates most of this activity has been of the sell-to-open variety, meaning traders are betting on the $29 level to act as a short-term ceiling through January expiration. 

Bears are definitely out in full force today, with puts crossing at five times the normal intraday rate. It looks as though traders are buying to open the December 26 put, anticipating JetBlue Airways Corporation will move back below $26 before front-month options expire at the close on Friday, Dec. 18. However, if JBLU can extend today's momentum, an unwinding of all this pessimism could spark additional gains. 

A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!


  
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


With This Lithium Stock, It Will Be Better to Be Too Early Than Too Late
Click to continue to advertiser's site.
American Airlines Drops on Jobs Update
American Airlines said it will reduce management and support staff by 30%
June Kicks Off With Slew of Economic Data
June begins with another round of retail earnings
With This Lithium Stock, It Will Be Better to Be Too Early Than Too Late
Click to continue to advertiser's site.