Alphabet Inc (GOOGL) Options Traders Aim For Higher Highs

Alphabet Inc (GOOGL) is riding tech sector tailwinds to never-before-seen levels

by Alex Eppstein

Published on Sep 22, 2016 at 1:41 PM
Updated on Jun 24, 2020 at 10:16 AM

Like this fellow tech giant, Alphabet Inc (NASDAQ:GOOGL) hit a record high earlier amid broad-market tailwinds. Specifically, the stock topped out at $819.06, and was last seen up 1.7% at $818.93, after MoffettNathanson said the company's total available market may be several times larger than analysts expect. All the while, it appears options traders are rolling the dice on even higher highs.

Drilling down, GOOGL's intraday call volume more than doubles the usual amount, with roughly 25,000 contracts on the tape. Several weekly options may be seeing buy-to-open activity, including the 9/23 820-strike call. By purchasing these positions, short-term traders are counting on the stock toppling $820 by tomorrow's close, when the series expires.

By no means is the interest in weekly strikes limited to today. In fact, GOOGL's top open interest position is the weekly 9/23 815-strike call, where data from the major exchanges confirms sizable buy-to-open action over the past month. And, more generally speaking, short-term options speculators have been unusually call skewed. Alphabet's Schaeffer's put/call open interest ratio (SOIR) of 0.84 rests below 65% of all readings taken in the last year.

Now is an ideal time to strike on short-term options, too, particularly for buyers. Specifically, GOOGL's Schaeffer's Volatility Index (SVI) of 15% rests at a 12-month low, suggesting the options market is pricing in relatively muted near-term volatility expectations at the moment.

Outside of the options pits, optimism on Alphabet Inc (NASDAQ:GOOGL) isn't hard to find. Twenty-seven of 29 analysts rate the tech stock a "buy" or better, compared to two "holds" and not a single "sell." What's more, a razor-thin 0.4% of GOOGL's float is sold short.

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