Most Active Options: Amazon.com, Inc. and Valeant Pharmaceuticals Intl Inc

Options traders have recently been buying to open calls on Amazon.com, Inc. (NASDAQ:AMZN) and Valeant Pharmaceuticals Intl Inc (NYSE:VRX)

by Alex Eppstein

Published on May 16, 2016 at 12:34 PM

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 e-tail giant Amazon.com, Inc. (NASDAQ:AMZN) and drugmaker Valeant Pharmaceuticals Intl Inc (NYSE:VRX).

most active options may 16

As Warren Buffett's Berkshire Hathaway Inc. (NYSE:BRK.A) shakes up its portfolio, so too is Omega Advisors -- which has dissolved its stake in AMZN, per a Securities and Exchange Commission (SEC) filing. The news has set the e-tail stock back 0.6% today at $705.43, overshadowing the company's decision to expand its private-label offerings. Just last week, though, the shares notched a record high of $722.45.

In the options pits, traders are holding out hopes of a rebound. Buy-to-open activity is detected at the May 715 call, suggesting option players foresee AMZN taking out the strike by Friday's close, when front-month contracts expire. This is business as usual for options traders, who have bought to open 1.23 calls for every put during the last two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- ranking in the 78th annual percentile. In other words, Amazon.com, Inc. speculators have been picking up bullish bets over bearish at an accelerated clip of late.

Meanwhile, VRX is down 1.8% at $25.43, after Jana Partners liquidated its holdings in the pharmaceutical firm. Apparently, news that the company has expanded its rebate program for a pair of heart drugs -- as was expected after its pricing practices came under fire on Capitol Hill -- is failing to provide a technical boost. Of course, VRX is no stranger to steep losses, having lost three-quarters of its value in 2016 alone. Last Friday, in fact, the shares panned a five-year low of $23.55.

In the options pits, one strike that may be seeing buy-to-open activity is the in-the-money May 25 call. This wouldn't be unusual, even though Valeant Pharmaceuticals Intl Inc has struggled mightily on the charts. For example, the stock's 10-day ISE/CBOE/PHLX call/put volume ratio checks in at 1.93, with long calls nearly doubling puts. On top of that, the ratio registers near the top quartile of its annual range, hinting at a stronger-than-usual preference for bullish bets over bearish in recent weeks.

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