Schaeffer's Top Stock Picks for '25

Most Active Options: Lockheed Martin, United States Steel

Put buyers have been pounding Lockheed Martin Corporation (LMT), while United States Steel Corporation (X) has earned attention from call buyers

Aug 22, 2016 at 2:20 PM
facebook X logo linkedin


The 20 stocks listed in the table below have attracted the highest total options volume during the past 10 trading days. Names 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 stocks of notable interest are aerospace firm Lockheed Martin Corporation (NYSE:LMT) and steel stock United States Steel Corporation (NYSE:X).

most active options august 22

LMT is 0.5% higher at $255.32, on the heels of positive analyst attention. Specifically, Bernstein raised its price target on the stock to $259 from $245. This represents a rare dose of optimism for the shares, despite their 17.5% year-to-date advance -- and last week's record high of $266.93.

For instance, two-thirds of analysts rate LMT a "hold" or worse. Not to mention, the stock's consensus 12-month price target of $260.42 is just a stone's throw away from present levels. Elsewhere, short interest absolutely erupted during the past two reporting periods, nearly quintupling to 13.6 million shares.

On top of that, at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 2.19 puts for every call during the past two weeks -- 3 percentage points from an annual high. Plus, Lockheed Martin Corporation's Schaeffer's put/call open interest ratio (SOIR) of 2.46 outstrips all other readings from the past year. To be sure, some of these puts may have come at the hands of shareholders hedging, but an unwinding of "vanilla" bears could contribute to tailwinds for the long-term outperformer.

X stock is benefiting from upbeat brokerage attention, too. Specifically, the shares have gained 2.9% at $20.98, after Citigroup initiated coverage with a "buy" endorsement and a $27 price target. This is fairly unusual, as 11 of 12 analysts rate U.S. Steel a "hold" or worse.

While the brokerage crowd is generally bearish toward the stock, options traders are anything but. During the past two weeks at the ISE, CBOE, and PHLX, speculators have bought to open 1.60 X calls for every put -- a ratio that stands just 10 percentage points from an annual peak. Echoing this call-focus, the shares sport an SOIR of 1.56, which rests below 85% of comparable readings recorded in the prior 12 months.

Speaking of which, call options are hot among X traders this afternoon. Intraday volume is at 1.6 times the norm, and buy-to-open activity is detected at the weekly 8/26 20-strike call -- suggesting speculators foresee additional upside for U.S. Steel through week's end, when the series expires.

The bullish bets make sense in light of United States Steel Corporation's technical trajectory. Despite pulling back from a late-July annual high of $27.64, the stock has advanced a mind-bending 163% year-to-date, and may be finding a foothold at its 50-day moving average.

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.
 
 

You have the chance to join one of Bernie's most exclusive programs, complete access at HUGE savings!

As we prepare for a new administration to take the reins in Washington, the near-term market landscape is rife with uncertainty.

The Federal Reserve has already hinted at the turbulence ahead, lowering its interest rate outlook for 2025.

Meanwhile, breakthroughs in artificial intelligence (AI), quantum computing, and other transformative sectors have unlocked incredible profit potential.

But these opportunities are fleeting, and timing is everything. That's where Quick-Hit Trader comes in.

Quick-Hit Trader is designed for precision and speed, getting you in and out of the market in a flash. While other investors scramble to navigate volatile conditions, you'll have access to expertly curated trades that leverage these rapid shifts to deliver explosive profits in short order.

This is your chance to capitalize on the fast-moving market like never before. Are you ready to make your move?