Most Active Weekly Options: Amazon.com, Inc. and Alibaba Group Holding Ltd

Amazon.com, Inc. (AMZN) and Alibaba Group Holding Ltd (BABA) call options have taken center stage today

Nov 7, 2016 at 2:32 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 e-commerce stocks Amazon.com, Inc. (NASDAQ:AMZN) and Alibaba Group Holding Ltd (NYSE:BABA). Here's a closer look at how weekly options traders are lining up on AMZN stock and BABA stock.

most active weekly options nov 7

Bearish options betting has been ramping up on e-tailer AMZN in recent weeks. The stock's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits at 1.04, higher than 82% of all readings from the past year. What's more, Amazon's front-month gamma-weighted Schaeffer's put/call open interest ratio (SOIR) sits at a top-heavy 1.98, with puts doubling calls in the November series.

Today, though, calls have had a modest advantage, outpacing puts 38,000 contracts to 30,000. The weekly 11/11 790- and 800-strike calls are the busiest, and both appear to be seeing at least some buy-to-open activity. By purchasing these positions, the traders are anticipating AMZN will end atop the respective strike prices by week's end, when the series expires.

This bullish options attention is possibly being brought on by a technical breakout in the shares. Specifically, Amazon.com, Inc. has jumped 4.2% to trade at $786.84 amid a broad-market rally. What's more, on a year-to-date basis, the internet retail stock has advanced a market-thumping 16.4%.

Meanwhile, rival BABA has seen accelerated call buying in recent months. The e-commerce stock's 50-day ISE/CBOE/PHLX call/put volume ratio of 2.65 ranks just 13 percentage points from a 12-month peak. Not to mention, the stock's gamma-weighted SOIR of 0.62 indicates call open interest handily outstrips put open interest in near-the-money options expiring within three months.

It's more of the same today, as call volume on the e-tailer is twice that of puts. But while the weekly 11/11 series is extremely popular -- accounting for seven of the 10 most active strikes -- the most in-demand option overall is the February 2017 110-strike call. According to Trade-Alert, one speculator shelled out over $2.5 million to purchase 10,000 contracts at the out-of-the-money strike -- although it looks like this block may be tied to stock.

Technically, Alibaba Group Holding Ltd shares have been pulling back from their late-September highs near $110, and are now struggling to overcome the round-number $100 century level -- even considering this afternoon's 2.3% pop to hover around $99.81. With huge short-term call open interest at the 100 strike totaling roughly 85,000 contracts, this area could continue acting as a speed bump in the months ahead.

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