Most Active Weekly Options: Microsoft Corporation and Wells Fargo & Co

Microsoft Corporation (NASDAQ:MSFT) and Wells Fargo & Co (NYSE:WFC) have seen an influx of weekly options trading

Sep 15, 2016 at 11:29 AM
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The 20 stocks listed in the table below have attracted the highest weekly 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 tech stock Microsoft Corporation (NASDAQ:MSFT) and big bank Wells Fargo & Co (NYSE:WFC).

Most Active Weekly Options Sept 15

MSFT calls are crossing at an accelerated clip today, with roughly 16,000 contracts on the tape versus about 9,000 puts. The stock's weekly 10/28 55-strike call has received notable attention, and it looks like new positions are being purchased here. If this is the case, the goal is for MSFT stock to extend its lead north of $55 through the close on Friday, Oct. 28 -- when the weekly series expires.

More broadly speaking, options traders have shown a preference for long calls over puts of late. For instance, at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculative players have bought to open 65,192 calls on MSFT in the last 20 sessions, compared to 43,370 puts.

Technically, Microsoft Corporation has put in a solid performance since bottoming at a post-"Brexit" low near $48 in late June, up 18% at $56.80. More recently, the shares pulled back after topping out at a 16-year peak at $58.70 on Aug. 26, but appear to have found a foothold in the $56 neighborhood -- home to MSFT's July 20 post-bull gap close.

It's been a terrible month for WFC, as the stock sells off amid the financial company's fundamental woes -- which have prompted a federal investigation. In September alone, the shares of WFC have surrendered 10.4% -- including today's 2.1% drop to trade at $45.53. This most recent plunge comes after the security was hit with price-target cuts at Barclays (to $58) and UBS (to $44), the latter of which rests in territory not charted since December 2013.

This bearish bias is seen in the options pits, too, where puts are crossing at eight times the average intraday rate -- and outpacing calls by a nearly 2-to-1 ratio. In fact, with more than 79,000 put options on the tape, volume is in the 100th percentile of its annual range.

The most active is Wells Fargo & Co's weekly 9/23 44-strike put, where there appears to be a mix of buy- and sell-to-open activity occurring -- a theory echoed by data from the ISE. Those purchasing new positions expect WFC to sink south of $44 by next Friday's close, when the weekly series expires. Conversely, those writing the puts are betting on $44 to serve as a short-term foothold for the financial shares.

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