Most Active Options: Chesapeake Energy and Freeport-McMoRan

Weekly option traders have set their sights on Chesapeake Energy Corporation (NYSE:CHK) and Freeport-McMoRan Inc (NYSE:FCX)

Dec 28, 2015 at 1:55 PM
facebook X logo linkedin

The 20 stocks listed in the table below have attracted the highest 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 Chesapeake Energy Corporation (NYSE:CHK) and Freeport-McMoRan Inc (NYSE:FCX).


Commodity stocks are taking it on the chin this afternoon amid crude's crash, and CHK is no exception. The shares were last seen nearly 9% lower at $4.06, and have landed on the short-sale restricted list. Year-to-date, the stock has surrendered close to four-fifths of its value.

As such, bearish betting has been transpiring at an accelerated clip across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, over the last two weeks, nearly twice as many puts as calls have been bought to open. The corresponding 10-day put/call volume ratio of 1.91 outstrips 80% of comparable readings from the past year.

In today's options pits, puts hold a slight advantage over calls. However, the most active weekly option is the 12/31 4.50-strike call, where traders may be purchasing fresh positions in hopes of a bounce by Thursday's close -- when the series expires.

Elsewhere on Wall Street, pessimism reigns. Seventeen of 19 analysts currently consider Chesapeake Energy Corporation a "hold" or worse. In addition, 42.4% of its float is sold short, which would take almost two weeks to cover, at average daily trading levels.

Turning to FCX, the mining stock is off about 8% at $6.96, following news co-founder James Moffett will be stepping down from the board, and from his role as company chairman due to pressure from Carl Icahn. As a result, the shares' year-to-date deficit now registers at 70%.

At least one group of traders expects an end-of-week rebound, though. Specifically, buy-to-open activity is detected at the weekly 12/31 7-strike call. Longer term, call buying has been popular on FCX, per its 10-day ISE/CBOE/PHLX call/put volume ratio of 4.71 -- just 3 percentage points shy of an annual peak.

Elsewhere on the Street, short interest exploded by 43.6% during the last two reporting periods, and now accounts for 11.8% of the stock's float. However, at Freeport-McMoRan Inc's typical volumes, it would take less than three days to cover these positions. Also, the brokerage bunch is evenly divided, with six analysts doling out "buy" or better endorsements, versus six that sport tepid "hold" suggestions.

Unlock Weekend Profits with Chris Prybal's Favorite Strategy Up +487.5% in 2024

With the markets going left, right, and sideways, you need to have a plan now more than ever. 

Expert Trader Chris Prybal is no stranger to volatility, and has mastered finding big stock rallies while other traders aren't looking over the weekend. Rallies that produced gains like +207% on RTX calls, +236% on MARA calls, and +238% on NET calls.

A few simple moves on Sunday at 7pm could be the “Secret Sauce” your portfolio needs to not just stay afloat, but make unprecedented gains in this turbulent market.

Don’t sit on the sidelines, beat the market with Chris Prybal's strategy. Join him now!