Short-Term Option Bulls Take Aim At Alphabet Inc (GOOGL)

Traders are targeting Alphabet Inc's (GOOGL) weekly options

Sep 6, 2016 at 2:36 PM
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As is usual for S&P 500 Index (SPX) stocks following Labor Day, Alphabet Inc (NASDAQ:GOOGL) is making headway -- along with this China-based peer. At last check, GOOGL stock was up 1.3% at $807.33, approaching last month's record high of $813.88. Not surprisingly, call options are in heavy demand.

By the numbers, roughly 23,000 GOOGL calls are on the tape, more than doubling the expected intraday amount of 10,000. The most active option is the weekly 9/9 810-strike call, where nearly 3,300 contracts have crossed -- some of which were likely bought to open. For buyers, the goal is for Alphabet stock to topple $810 by Friday's close, when the weekly series expires.

In recent months, call buyers have been on the prowl. GOOGL's 50-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 1.69, near the top one-third of all readings recorded in the past year. What's more, the stock's gamma-weighted Schaeffer's put/call open interest ratio (SOIR) stands at 0.68, with near-the-money calls in the front three-months' series easily outweighing puts.

Options traders are hardly the only ones who are bullish toward GOOGL. An astounding 27 of 29 analysts rate the shares a "buy" or better, with not a single "sell" opinion to be found. Also, despite rising 11% in the most recent reporting period, short interest accounts for a slim 0.4% of the stock's total float.

That's not to say Alphabet Inc (NASDAQ:GOOGL) isn't deserving of the love it's received on the Street. As alluded to, the stock hit a record high less than a month ago. Plus, GOOGL's quarterly performance has been sensational, with the shares closing in on a 15% gain since the start of July.

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