Most Active Options: Facebook Inc and United States Steel Corporation

Put buying has been popular on Facebook Inc (NASDAQ:FB) and United States Steel Corporation (NYSE:X)

by Karee Venema

Published on Mar 21, 2016 at 1:56 PM
Updated on Jun 24, 2020 at 10:16 AM

The 20 stocks listed in the table below have attracted the highest 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 tech stock Facebook Inc (NASDAQ:FB) and steel producer United States Steel Corporation (NYSE:X).

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Put buying has hit fever pitch in FB's options arena. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for instance, FB's 10-day put/call volume ratio of 0.83 rests above all other comparable readings taken in the past year.

Drilling down, the stock's April 95 strike has seen the biggest rise in put open interest over this time frame, with 9,504 contracts added. While the ISE confirms that a healthy portion of these puts were purchased to open, there has been a significant amount of sell-to-open activity, as well.

For those initiating long positions, the goal is for FB to close south of $95 at the close on Friday, April 15 -- when front-month options expire. Meanwhile, those selling to open the puts expect $95 to serve as a floor through April options expiration.

This seemingly skeptical stance among options traders isn't shared elsewhere on Wall Street, though, with all but one of the covering analysts maintaining a "buy" or better rating. Given Facebook Inc's impressive 25% rally off its Jan. 20 year-to-date low of $89.37 to trade at $111.64 today, some of the recent put buying may be a result of shareholders protecting paper profits.

Put buyers have also been active in X's options pits, per its 10-day ISE/CBOE/PHLX put/call volume ratio of 1.54 -- in the 72nd annual percentile. Plus, the stock's Schaeffer's put/call open interest ratio (SOIR) of 2.75 sits just 4 percentage points from a 52-week peak. In other words, short-term speculators have rarely been as put-heavy toward X as they are now.

Today, puts are crossing at 1.7 times the expected intraday rate -- and are outpacing calls by a nearly 4-to-1 margin. Most active is the equity's January 2017 10-strike put, where it looks like speculators may be selling to close their positions.

Outside of the options pits, Jefferies lowered its outlook to "underperform" from "hold" -- but raised its price target to $10. The brokerage firm said it is projecting a summer slowdown for the stock that's up more than 146% from its Jan. 28 record low of $6.15 to trade at $15.14. Elsewhere, United States Steel Corporation announced late Friday that it would be laying off union and non-union workers and idling plants throughout Alabama, Ohio, and Texas.

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