Most Active Options: Apple Inc. and Twitter Inc

Weekly option traders continue to set their sights on Apple Inc. (AAPL) and Twitter Inc (TWTR)

by Alex Eppstein

Published on Mar 3, 2016 at 2:37 PM

The 20 stocks listed in the table below have attracted the highest 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 iPad parent Apple Inc. (NASDAQ:AAPL) and microblogging maven Twitter Inc (NYSE:TWTR).

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AAPL has edged 0.4% higher at $101.12, after the company launched a support page on Twitter -- which instantly got 50,000 followers. While the shares recently returned to triple-digit territory after spending most of January and February below the psychologically significant level, they're still down 4% on the year, and could struggle to take out resistance at their descending 60-day moving average.

Today's gains have AAPL call volume running at 1.5 times the expected intraday rate. Most active is the weekly 3/4 101-strike call, where over 30,000 contracts are on the tape. Digging deeper, International Securities Exchange (ISE) data suggests a mix of buying and selling activity.

Taking a step back, options traders are not sold on AAPL. The stock's 10-day ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.85 ranks just 4 percentage points from an annual peak. In other words, traders have been buying to open puts over calls at a quicker-than-normal clip of late.

By contrast, brokerage firms are firmly in Apple Inc.'s bullish camp. Twenty-five of 31 analysts rate the stock a "buy" or better, compared to six "holds" and not one "sell" recommendation. If the shares resume their 2016 trend lower, a round of downgrades could ensue, exacerbating selling pressure.

Shifting gears, TWTR has shot 3.3% higher to trade at $19.15, but it too is hesitating around its 60-day trendline. Longer term, it's been an absolute bloodbath for the stock, which has plunged 64% since its annual high of $53.49 in April.

Not surprisingly, option bears have been active on TWTR in recent months. The stock's 50-day ISE/CBOE/PHLX put/call volume ratio of 0.49 registers at an annual high. In terms of weekly options, one of the most popular today is the 3/4 19.50-strike call, which is seeing buy-to-open activity. By purchasing these positions, short-term speculators foresee TWTR taking out the $19.50 level by tomorrow's close, when the series expires.

Outside of the options pits, it's a mixed bag for Twitter Inc. While over half of analysts recommend selling the shares, 12 still maintain "buy" or better opinions. Likewise, nearly 9% of the stock's float is sold short, but this amount would take less than two days to cover, at TWTR's typical trading volume.

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