Most Active Options Update: Gilead Sciences, Inc. and Exxon Mobil Corporation

Pre-earnings option traders are scooping up long calls on Gilead Sciences, Inc. (NASDAQ:GILD) and long puts on Exxon Mobil Corporation (NYSE:XOM)

by Karee Venema

Published on Feb 1, 2016 at 3:37 PM

The 20 stocks listed in the table below have attracted the highest total options volume during the past 10 trading days. Stocks 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 pharmaceutical concern Gilead Sciences, Inc. (NASDAQ:GILD) and oil-and-gas issue Exxon Mobil Corporation (NYSE:XOM) -- both of which are scheduled to report quarterly earnings tomorrow.

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GILD has seen a rush of activity from call players ahead of its earnings report -- due out after tomorrow's close. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for example, the stock's 10-day call/put volume ratio of 4.41 sits just 2 percentage points from a 52-week peak.

This call-skewed action is continuing in today's session, with calls outpacing puts by a nearly 2-to-1 margin. It looks as if a number of pre-earnings speculators are buying to open GILD's weekly 2/5 80-strike call, hoping a well-received report will help the equity extend its lead over the round $80 mark.

Those purchasing Gilead Sciences, Inc.'s near-term options are willing to pay for higher volatility expectations ahead of earnings. Specifically, the stock's Schaeffer's Volatility Index (SVI) of 44% ranks in the 74th annual percentile. At last check, GILD was up 1.3% at $84.11 -- bouncing off of Friday's dismal milestone.

XOM is tumbling along with crude oil today, down 1.7% at $76.50. This is just more of the same for the energy stock that's shed 12.5% over the past year. Pre-earnings option traders have been bracing for more downside, per the equity's 10-day ISE/CBOE/PHLX put/call volume ratio of 3.55 -- in the 95th annual percentile.

Even more telling of this put bias is XOM's Schaeffer's put/call open interest ratio (SOIR) of 1.83 -- higher than all other comparable readings taken in the past year. In other words, short-term speculators are more put-heavy now on the security than they've been at any other point over the past year.

Today, despite a relatively light-volume session for Exxon Mobil Corporation, puts have a healthy lead over calls. It looks like one speculator may be closing out of a March 70-75 put spread, while others could be initiating new positions are the equity's weekly 2/5 75- and 75.50-strike puts. XOM will step into the earnings confessional ahead of tomorrow's open.

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