Most Active Weekly Options: AT&T Inc. and Freeport-McMoRan Inc

Time Warner Inc (TWX) suitor AT&T Inc. (T) and mining stock Freeport-McMoRan Inc (FCX) have attracted the attention of weekly options traders recently

Karee Venema
Oct 31, 2016 at 12:46 PM
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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. 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 are Time Warner Inc (NYSE:TWX) suitor AT&T Inc. (NYSE:T) and mining stock Freeport-McMoRan Inc (NYSE:FCX). Here's a closer look at how weekly options traders are lining up on T stock and FCX stock.

most active weekly options october 31

More than 49,450 call options have been bought to open on T in the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), compared to 16,810 put options. The resultant call/put volume ratio of 2.94 ranks just 11 percentage points from a 52-week peak, meaning call buyers have been initiating positions at a near-annual-high clip, too.

Among weekly options, the now-expired 10/28 38.50-strike call saw the biggest rise in open interest over that time frame, while the weekly 11/4 37-strike call -- which expires at this Friday's close -- comes in at a close second, with 9,684 contracts currently outstanding. Drilling down, it seems there's been a mix of buy- and sell-to-open activity occurring at the 37 strike. In other words, call buyers expect T to break out above $37 by week's end, while call sellers are betting on the strike to serve as a short-term ceiling.

Technically, T has shed roughly 16% since running into resistance near the $43.50 mark in mid-August -- with the downside recently exacerbated by AT&T Inc.'s $85 billion bid for TWX, a move that could have possible competition from tech titan Apple Inc. (NASDAQ:AAPL). Nevertheless, the stock seems to have found a foothold in the $36.40 neighborhood, with T last seen at $36.66.

Call buyers have blasted FCX in recent weeks, per the stock's 10-day call/put volume ratio of 1.94 -- which ranks in the elevated 77th annual percentile. This call-skewed bias is evident among short-term traders, too, with FCX's front-month gamma-weighted Schaeffer's put/call open interest ratio (SOIR) docked at 0.59. Simply stated, near-the-money calls outweigh puts among options expiring in the standard November series.

Looking back over the past two weeks, FCX's weekly 11/4 11-strike call has seen increased attention, with 4,487 contracts added. This option is hot again today, and is the most active among FCX's weekly options, with 2,357 contracts traded at last check. It's possible some of these calls are being bought to open, as speculators bet on the security extending its lead north of $11 through this Friday's close.

At last check, shares of FCX were up 1.9% at $11.15. Looking back, this same area has served as a stiff ceiling for Freeport-McMoRan Inc (NYSE:FCX) in recent months, and is currently home to the stock's 120-day moving average.

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