American Express Company (AXP) Option Bulls Come Out of the Woodwork

American Express Company (AXP) calls are hot as the shares muscle higher

by Andrea Kramer

Published on Feb 29, 2016 at 12:51 PM
Updated on Jun 24, 2020 at 10:16 AM

American Express Company (NYSE:AXP) is making headlines today, sending the stock higher -- and setting off a barrage of seemingly bullish options activity. The company was mentioned in Warren Buffett's annual letter to Berkshire Hathaway Inc. (NYSE:BRK.A) shareholders, with the Oracle of Omaha saying he likes AXP "fine, but there is no question it will have an abundance of competition." Meanwhile, American Express said it will close the sale of its Costco Wholesale Corporation (NASDAQ:COST) card portfolio to Citigroup Inc (NYSE:C) in June.

AXP was last seen 1.3% higher at $56.07, and calls are crossing the tape at four times the average intraday pace. Most of the action has transpired at the weekly 3/4 55-strike call, where more than 9,100 contracts have traded. It looks like a healthy portion of the calls may have been bought to open, suggesting the buyers expect AXP to extend its journey north of $55 through Friday's close, when the options expire.

Since touching a near-four-year low of $50.27 on Feb. 11, AXP has been on the mend. In fact, the stock is on pace to notch a close above its 30-day moving average for the first time since mid-October. However, the security still has a ways to go before filling its Jan. 22 post-earnings bear gap.

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Today's seemingly bullish options activity is relatively rare for American Express Company (NYSE:AXP) -- not surprising, considering the aforementioned long-term technical troubles. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day put/call volume ratio of 1.05 stands higher than 83% of all other readings from the past year. In other words, option buyers have picked up AXP puts over calls at a faster-than-usual clip during the past 10 weeks.


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