Most Active Options: Tesla Motors Inc and United States Steel Corporation

Tesla Motors Inc (NASDAQ:TSLA) and United States Steel Corporation (NYSE:X) are moving in opposite directions on the charts

Nov 28, 2016 at 11:48 AM
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The 20 stocks listed in the table below have attracted the highest 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. Among the stocks attracting notable attention are electric car maker Tesla Motors Inc (NASDAQ:TSLA) and steel stock United States Steel Corporation (NYSE:X). Here's a quick look at how options traders are lining up on TSLA and X. 

Most Active Options November 28

Call buying has been popular in TSLA's options pits for months, per the stock's 50-day call/put volume ratio of 1.12 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- a reading in the 92nd percentile of its annual range. But that doesn't appear to tell the whole story, particularly considering the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.76 shows puts far outweighing calls among options set to expire in the next three months. Moreover, this ratio sits just one percentage point from an annual put-skewed high.

Taking a look at the options that saw the largest rise in open interest over the past two weeks reveals plenty of pessimism. Specifically, one of the most active strikes was the March 180 put, where buyers have been eyeing a drop to levels not seen since February. Plus, peak open interest in the front-month December series sits at the 200 put, where positions have largely been bought to open, meaning traders are betting on TSLA remaining below the round $200 mark through the option's expiration, on Friday, Dec. 16.

Adding to the argument that TSLA options traders are not firmly bullish, short interest on the stock has been ticking higher in recent weeks, and currently represents about 25% of the equity's available float. At TSLA's typical daily pace, it would take more than a week to cover these bearish positions. Therefore, it's likely some of these short sellers have been picking up calls to protect against an upside surprise.

Turning a quick eye back to the options pits, TSLA puts have a rare lead over calls today. The weekly 12/2 series is particularly popular, accounting for seven of the 10 most active strikes. Most popular is the 200-strike call, where it appears traders are both buying and selling to open positions. Meanwhile, a few bulls have been spotted buying to open the weekly 12/2 215-strike call, betting on a bounce by the end of the week.

Today Tesla Motors Inc (NASDAQ:TSLA) is trading 0.9% higher at $198.44, shaking off a disappointing review of its Model X in Consumer Reports from last Friday. The stock is down 17.3% in 2016, and is still staring up at the round $200 level. Plus, the shares are currently going head to head with the 50-day moving average, which has limited TSLA's upward moves since August.

Along with its fellow steel stocks, X has enjoyed a sizeable rally since Donald Trump's surprise White House win earlier this month. Today, however, the shares are off 2.3% at $32.46 today, even after Barclays raised its price target on X to $27 from $18. The stock hit a nearly two-year high of $33.78 on Friday, but with a 14-day Relative Strength Index (RSI) of 86 -- deep in overbought territory -- a breather may have been overdue.

In recent months, options traders have been betting on upside moves for X, with the stock's 50-day call/put volume ratio at the ISE, CBOE, and PHLX seated in the 85th percentile of its 12-month range, at 1.20. Among the options to see the largest increases in open interest over the last 10 sessions, however, were the January 27 and 25 puts. And with data from the major exchanges confirming heavy buy-to-open action at those strikes, it's safe to assume plenty of speculators are betting on a downward move over the next couple of months.

X puts are trading at an accelerated rate this morning, and the weekly 12/2 series represents seven of the 10 most popular options. But while the 30-, 31-, and 32-strike puts are among the top positions, it looks like at least some of the action is on the sell-to-open side. If so, these put sellers are looking for the respective strike prices to serve as a floor for X shares through Friday's close, when the weekly series expires.

Outside of the options pits, X has seen plenty of pessimism. While short interest has been dropping swiftly in recent weeks, these bearish bets still account for 23.2% of United States Steel Corporation's (NYSE:X) total float. But shareholders shouldn't be sweating too much. After all, the stock has quadrupled in value in 2016 alone and is on track to finish November above its 80-month moving average for the first time since 2010.

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