Most Active Weekly Options: Tesla Motors Inc and Valeant Pharmaceuticals Intl Inc

While option traders remain skeptical of Tesla Motors Inc (TSLA), they're bullish on Valeant Pharmaceuticals Intl Inc (VRX)

Feb 25, 2016 at 10:54 AM
facebook X logo linkedin


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 Model S manufacturer Tesla Motors Inc (NASDAQ:TSLA) and drugmaker Valeant Pharmaceuticals Intl Inc (NYSE:VRX).

160225mawo

TSLA is up 0.1% at $179.09 after stumbling out of the gate. While the shares have been rebounding since reaching a two-year low of $141.05 earlier this month, they've run into resistance at their 30-day moving average.

However, option traders aren't buying the bounce. In fact, during the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have initiated 1.24 long puts for each call -- a ratio that ranks in the bearish 99th annual percentile.

As mentioned above, weekly options have been extremely popular on Tesla Motors Inc recently. Among the most active over the last five sessions are the weekly 2/26 170- and 175-strike puts, which have seen buy-to-open action, according to data from the ISE, CBOE, and PHLX. In other words, these traders believe TSLA will close this week below the respective strikes. Today, in fact, it looks like more speculators are purchasing new positions at these strikes.

Meanwhile, VRX's weekly 2/26 85-strike call has been very popular in the past week, with open interest adding over 4,900 contracts. According to the ISE, CBOE, and PHLX, a large number of these options were bought to open as traders roll the dice on gains by week's end, when the series expires -- prior to Monday morning's earnings call.

Taking a step back, VRX call buyers have been busy over the last 10 weeks. The stock's 50-day ISE/CBOE/PHLX call/put volume ratio ranks in the high 84th percentile of its annual range, indicating traders have bought to open calls over puts at an accelerated clip in recent months -- despite a number of red flags, including congressional scrutiny.

Things aren't any better on the charts, either. Valeant Pharmaceuticals Intl Inc has lost over 68% since its all-time high of $263.81 in August, last seen 0.6% lower at $83.34. From a contrarian perspective, a capitulation among option bulls could lead to headwinds down the road.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical  levels, and top economic stories straight to your inbox.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI