Most Active Weekly Options: Alibaba Group Holding Ltd and Paypal Holdings Inc

Weekly options traders have been hot for Alibaba Group Holding Ltd (NYSE:BABA) and Paypal Holdings Inc (NASDAQ:PYPL)

Jul 25, 2016 at 2:19 PM
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The 20 stocks listed in the table below have attracted the highest total 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 of interest are e-commerce concern Alibaba Group Holding Ltd (NYSE:BABA) and payment processor Paypal Holdings Inc (NASDAQ:PYPL).

Most Active Weekly Options July 25

BABA call buyers have been busy in recent weeks, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, the stock sports a 10-day call/put volume ratio of 2.73 across this trio of exchanges -- in the 92nd percentile of its annual range.

Drilling down over this time frame, the stock's weekly 7/29 85-strike call has seen the biggest rise in open interest among active weekly contracts. According to Trade-Alert, it looks like a portion of this action has been of the buy-to-open kind, meaning speculators are betting on BABA surging north of $85 by this Friday's close, when the series expires.

Today, BABA hit an intraday peak of $84.79, but has since swung 1.9% lower to trade at $82.87, as traders react to the $4.8 billion buyout of Yahoo! Inc.'s (NASDAQ:YHOO) core business. YHOO is one of Alibaba Group Holding Ltd's biggest shareholders. Nevertheless, the stock has rallied nearly 40% off its mid-February lows, and recently broke out above previous congestion.

PYPL, meanwhile, has seen an influx of put buying in recent months, per its 50-day put/call volume ratio of 0.90 at the ISE, CBOE, and PHLX -- an annual high. Echoing this is the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.42 -- higher than all other similar readings taken in the past 12 months. In fact, PYPL put open interest hit a 52-week peak last Friday.

Among weekly options, the security's weekly 7/29 36.50- and 38.50-strike puts are home to peak put open interest of 4,287 and 4,042 contracts, respectively. For those that bought to open these puts, the goal is for PYPL to be sitting south of the strikes at week's end. Regardless of where the stock settles, though, risk for the options buyers is limited.

On the charts, the stock was swiftly rejected near the round $40 mark last week -- thanks in no small part to a post-earnings pummeling. This afternoon, Paypal Holdings Inc is up 1.1% to trade at $37.85.

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