Most Active Options: Facebook Inc and Alibaba Group Holding Ltd

Weekly option traders are once again betting on Facebook Inc (NASDAQ:FB) and Alibaba Group Holding Ltd (NYSE:BABA)

Jan 4, 2016 at 1:32 PM
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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 social media maven Facebook Inc (NASDAQ:FB) and Chinese e-tailer Alibaba Group Holding Ltd (NYSE:BABA).


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Like most stocks, FB has had a rough go of it to start the year. The shares were last seen down 3% at $101.54, and earlier breached the round-number century level for the first time since late October. The struggles come amid news that CEO Mark Zuckerberg wants to code a robotic personal assistant, and FB-owned Oculus will begin taking pre-orders for its Rift virtual reality headset starting Wednesday.

In today's options pits, FB puts are crossing at twice the normal intraday rate. The most active weekly strike is the 1/22 95 put, where one trader may have bought to open just over 8,200 contracts. If so, this speculator is gambling on the stock extending its losses and falling below $95 by the close on Friday, Jan. 22 -- which hasn't been done on a closing basis since mid-October.

Put buying is nothing new for Facebook Inc speculators. During the last 10 sessions, the stock has amassed a put/call volume ratio of 0.58 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). While this reading indicates long calls outstrip puts on an absolute basis, it ranks in the high 92nd annual percentile, suggesting traders have been placing bearish bets at a historically elevated pace of late.

On the flip side, long BABA calls have been extremely popular in recent weeks. The stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 3.07 sits above 83% of comparable readings from the past year. Calls are again hot today -- crossing the tape at double the expected intraday clip -- with buy-to-open activity detected at the weekly 1/29 85 strike.

The bullish bets are surprising, given the fact that BABA is getting buried along with other Chinese tech stocks. At last check, the shares have plunged nearly 6% at $76.44, and are testing their 80-day moving average, located at $75.

If Alibaba Group Holding Ltd continues to dive, it could be met with a round of downgrades. After all, 16 of 19 covering analysts rate the shares a "buy" or better, compared to just three "hold" recommendations and not a single "sell."

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