Monsanto Company (MON) Call Options Stay Hot Amid Buyout Talk

Rumors about a new buyout bid from Bayer AG have Monsanto Company (NYSE:MON) options volume soaring again

May 31, 2016 at 3:03 PM
facebook X logo linkedin

Monsanto Company (NYSE:MON) call options have been extremely popular this month, amid the agricultural company's ongoing M&A drama. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows 8.73 calls have been bought to open for every put during the past two weeks, a ratio that tops 94% of all others from the past year. Plus, MON's Schaeffer's put/call open interest ratio (SOIR) of 0.33 ranks in just the 3rd annual percentile, meaning short-term options traders are uncommonly call-skewed. 

The June 115 call added the most open interest during the last two weeks by far, and is now home to peak open interest for MON options. Data from the major options exchanges confirms substantial buy-to-open activity here, suggesting traders are hoping for MON to top $115 before front-month options expire at the close on Friday, June 17. 

Today, MON options traders are again targeting calls at an accelerated rate, with intraday volume more than doubling the intraday norm. Two of the most popular options are the weekly 6/3 and July 120 calls, which are likely seeing a mix of buying and selling activity. Elsewhere, other traders may be buying to open the July 110 call, seemingly betting on extended gains from MON over the next two months. 

Unfortunately for short-term speculators, they're paying hefty premiums for near-term MON options. The stock's 30-day at-the-money implied volatility has jumped to 40.2%, putting it in the 99th percentile of its annual range. Moreover, MON's Schaeffer's Volatility Index (SVI) of 39% is higher than 71% of all other readings from the past year. In short, the options market is pricing in elevated volatility expectations for MON. 

Shifting gears, Monsanto Company (NYSE:MON) stock volume is soaring today, with the shares up 2.4% at $112.17, amid new rumors that Bayer AG may raise its recently rejected buyout offer. In the meantime, MON will try to conquer the $112-$113 level, home to its most recent high and the site from which it sold off last June. Working in its favor, the stock is set to close above its 20-month moving average -- a level that served as support from 2011-2015 -- for the first time since the aforementioned sell-off. 

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 calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI