Early Options Trades on Starbucks, Analog Devices, and Ford Stock

Starbucks, Analog Devices, and Ford stocks are all seeing accelerated options trading

Apr 17, 2017 at 11:47 AM
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Starbucks stock is seeing heavy options trading today, with calls more than doubling puts. In fact, call volume is on pace to settle in the 88th annual percentile, and these options account for seven of the 10 most popular strikes today. The April 58 and 58.50 calls are among the most active options, along with the weekly 4/28 60-strike call. It's possible traders are buying to open positions here, expressing confidence in SBUX stock rising in the coming weeks. 

The weekly options are particularly noteworthy, since they encompass the company's earnings release, currently scheduled for the night of Thursday, April 27. Even with this event on the horizon, near-term SBUX options are well-priced at the moment, from a volatility perspective. This is according to Starbuck's Schaeffer's Volatility Index (SVI) of 13%, which is just 3 percentage points from an annual low. At last check, SBUX shares were up 0.8% at $57.97, and well off their November lows near the half-century mark.

Elsewhere, put traders are targeting semiconductor stock Analog Devices, Inc. (NASDAQ:ADI). More than 6,500 contracts have changed hands at the May 75 put -- including a 6,000-contract block -- compared to fewer than 70 at the next most popular strike. It seems likely buy-to-open activity is taking place here, so traders are betting on ADI stock sliding below $75 before the options expire at the close on Friday, May 19. 

This type of activity is very uncommon in ADI's options pits. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows ADI stock has a 10-day call/put volume ratio of 11.64, which ranks in the 98th annual percentile. In fact, put volume today is already close to topping its 52-week high of 6,724 contracts from Feb. 14. ADI shares were last seen near breakeven at $76.53, but still boast a 12-month advance of 30.4%. 

Finally, options traders are taking a liking to Ford Motor Company (NYSE:F), after Barron's (subscription required) said shares of the automaker are "too cheap." Ford stock has responded with a 1.2% gain to trade at $11.25, and call volume is slightly accelerated. Specifically, bullish options traders appear to be buying the April 11.50 call, which is the most popular strike today. 

This is nothing new, though, as F stock boasts a 10-day call/put volume ratio of 1.84 at the ISE, CBOE, and PHLX, which tops 70% of comparable readings from the past year. At the same time, short interest has been rising fast on Ford stock, so short sellers may be using call options to hedge against an unexpected upside move in the shares -- which have surrendered 15% over the past 12 months. 
 

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