Most Active Options: Apple Inc. and Microsoft Corporation

Call buyers have set their sights on Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT)

Jun 13, 2016 at 3:24 PM
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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 stocks Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT).

Most Active Options June 13

Call buying has been picking up speed in AAPL's options pits of late. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for instance, the stock's 10-day call/put volume ratio has jumped to 1.64 from 1.26 in the past two weeks, and now ranks in the bullishly skewed 60th annual percentile.

Today, calls have the edge over puts, with 211,000 of the former and 145,000 of the latter on the tape so far. Most active is AAPL's June 98 call, where it looks as if new positions are being purchased. In other words, call buyers expect AAPL to rally back above $98 by this Friday's close, when the front-month options expire.

At last check, though, shares of AAPL were off 1.1% at $97.71 -- widening their year-over-year deficit to 23%. And, while optimism is building in the options pits, skepticism is growing elsewhere on Wall Street. In fact, short interest surged 79% in the most recent reporting period. However, these shorted shares account for less than 2% of AAPL's available float, meaning the bearish bandwagon is far from crowded. The stock could be pressured even lower, as more short sellers pile on.

Elsewhere, traders are digesting the latest developments from the first day of Apple Inc.'s annual Worldwide Developers Conference (WWDC). Among the many updates Apple unveiled today were its newest operating system, iOS 10, and a wider app base for its virtual assistant, Siri. This comes on the heels of last week's big blue-chip partnership.

Dow component MSFT is making headlines of its own, after announcing it will buy LinkedIn Corp (NYSE:LNKD) in its largest deal to date. Wall Street doesn't seem to be too enamored with the news, with shares of MSFT down 2.7% at $50.11 -- the biggest decliner on the Dow.

Nevertheless, call volume is running at two times what's typically seen at this point in the day. Most active is MSFT's June 50 call, where it looks like some of the activity could be of the buy-to-open kind. If this is indeed the case, options traders are betting on MSFT to reverse course and rally through week's end.

Today's accelerated call activity is par for the course in MSFT's options pits, though. At the ISE, CBOE, and PHLX, the security's 10-day call/put volume ratio of 3.22 ranks just 10 percentage points from a 52-week peak. Plus, Microsoft Corporation's Schaeffer's put/call open interest ratio (SOIR) of 0.56 ranks in the 31st annual percentile, meaning short-term speculators are more call-heavy than usual toward MSFT.

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