Most Active Weekly Options: Facebook Inc and Twitter Inc

Call buyers have set their sights on Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR)

Aug 11, 2016 at 3:30 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 social media stocks Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR).

Most Active Weekly Options August 11

Optimism has been building on FB in recent weeks. In the options pits, speculators at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 288,405 FB call options in the last 10 sessions, compared to 146,687 put options. Plus, the resultant call/put volume ratio of 1.97 ranks in the 77th annual percentile.

Among weekly options, the stock's weekly 8/12 125-strike call has seen the biggest rise in open interest over that time frame -- with 15,000 contracts added -- in what appears to be a mix of buy- and sell-to-open activity. Those buying to open the calls are expecting FB to settle north of $125 at tomorrow's close -- when the weekly series expires -- while those writing to open the calls were betting on the strike to serve as a short-term ceiling.

Today, though, the shares of Facebook Inc are up 0.3% at $125.27 -- widening their year-to-date lead to 20% -- and are within a chip-shot of their late-July earnings-induced record high of $128.33. Off the charts, Facebook is currently trying to sort through its recent ad-blocking debacle. Additionally, the social media giant is reportedly meeting resistance from large media companies over video-content deals.

Call buying has been picking up steam on TWTR this month. At the ISE, CBOE, and PHLX, for instance, the stock's 10-day call/put volume ratio has jumped to 3.54 from 2.18 since the start of August, and the current ratio ranks in the 68th percentile of its annual range. In other words, calls have been bought to open over puts at a faster-than-usual clip.

This accelerated call activity is continuing today, with TWTR calls crossing at three times the average intraday pace. While Trade-Alert suggests one options bull bought to open a massive block of 11,003 September 22 calls for an initial cash outlay of $528,144 (number of contracts * $0.48 premium paid * 100 shares per contract), shorter-term traders are targeting the stock's weekly 8/12 19.50- and 20-strike calls. There appears to be at least some buy-to-open activity occurring at these two weekly strikes, suggesting traders are betting on more upside for the shares through week's end.

At last check, TWTR was up 3.8% at $19.77, despite a Buzzfeed article accusing the company of filtering out harassing tweets directed at high-profile celebrities, including President Barack Obama and Caitlyn Jenner. In response, Twitter Inc said it believes "there are inaccuracies in the detail" of the report, and that it will "continue our work on making Twitter a safer place."

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