Most Active Weekly Options: Sunedison Inc and Freeport-McMoRan Inc

Call buyers have targeted struggling Sunedison Inc (NYSE:SUNE), while put buyers have taken aim at bouncing Freeport-McMoRan Inc (NYSE:FCX)

by Karee Venema

Published on Feb 22, 2016 at 2:29 PM

The 20 stocks listed in the table below have attracted the highest total weekly 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 solar power company Sunedison Inc (NYSE:SUNE) and mining firm Freeport-McMoRan Inc (NYSE:FCX).

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Call buyers have been piling into SUNE's options pits in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for example, the equity's 10-day call/put volume ratio of 7.36 rests in the 84th annual percentile.

Today's action is no different, with calls crossing the tape at a slightly accelerated clip -- and outpacing puts by a 4-to-1 margin. Most active is SUNE's weekly 2/26 2-strike call, where it looks as if new positions are being purchased. If this is the case, the goal is for the stock to rally north of $2 by week's end.

Considering more than 37% of Sunedison Inc's float is sold short, though, a portion of this recent call buying -- particularly, at out-of-the-money strikes -- could be a result of shorts hedging their bearish bets. However, given SUNE's dismal technical showing, these shorts have been in the driver's seat for some time. Year-over-year, the stock has surrendered 94% to trade at $1.44, and hit a 14-year low of $1.37 during last Thursday's massive slide.

Put buying, meanwhile, has been picking up speed on FCX of late, per the security's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.93 -- in the 84th percentile of its annual range. The equity's August 3.50 put has seen the biggest rise in open interest over this time frame, and it looks as if some of the action was of the buy-to-open kind.

Given today's big rally among miners, FCX call volume has jumped to four times the average intraday pace. The stock's January 2017 8- and 10-strike calls are most active, with more than 94,000 contracts collectively on the tape. According to Trade-Alert, this looks to be at the hands of one speculator who is rolling their call position up amid today's surge.

In fact -- and likely to the delight of David Tepper -- Freeport-McMoRan Inc is up 12% this afternoon at $7.75, despite a report from BB&T calling the security's recent rally overdone. Since hitting a 15-year low of $3.52 on Jan. 20, the shares of FCX have more than doubled.

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