Options Traders Blast Valeant, Facebook Stocks

FB shares topped out at an all-time peak earlier, but were last seen trading lower

Jun 26, 2017 at 12:15 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 names of notable interest are drugmaker Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and FAANG stock Facebook Inc (NASDAQ:FB). Here's a closer look at how options traders are positioning themselves on shares of VRX and FB.

most active stock options june 26

Valeant Options Traders Think There's More Room to Run

VRX stock has been on an absolute tear since bottoming at an eight-year low of $8.31 in late April. With today's 5.8% surge that has Valeant shares trading at $16.72, they've more than doubled in value over that time span, and are on track to close north of their 200-day moving average for just the second time since September 2015.

Options traders have been quick to bet on more upside for the security, too. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 77,454 calls have been bought to open in the last two weeks, compared to 23,482 puts. The resultant call/put volume ratio of 3.30 ranks just 12 percentage points from a 52-week peak, meaning this call buying has been occurring relative to put buying at a near-annual-high clip.

Calls are in high demand again today, with 91,165 contracts traded -- four times what's typically seen at this point in the day. The weekly 6/30 17-strike call is most active, with nearly 9,750 contracts on the tape. There appears to be some buy-to-open activity happening here, as options traders bet on more upside for VRX shares through this Friday's close, when the weekly series expires. However, with 16.4% of Valeant's float sold short, this could also be indicative of shorts hedging their bearish bets against any additional upside risk.

Weekly Calls Hot After FB Stock Hits Record High

Facebook stock hit a record high of $156.50 out of the gate on news the company was in talks to produce original programming. However, the shares were last seen trading down 0.7% at $154 amid a down day for tech stocks. Nevertheless, FB has tacked on nearly 34% in 2017, with recent pullbacks contained by its rising 50-day moving average.

Drilling down on FB's weekly options activity, 202,394 calls and 143,187 puts have traded in the last 10 sessions. The now-expired weekly 6/23 155- and 152.50-strike calls were most active, with a combined 167,154 contracts traded. In the weekly 6/30 series which expires this Friday, the 155-strike call drew the heaviest attention, with 45,692 contracts traded -- a notable portion of which were bought to open, according to the major options exchanges.

This strike is most active again today, with roughly 16,450 contracts on the tape so far. The weekly 6/30 157.50-strike call is gaining traction, too, with almost 16,000 contracts traded. There appears to be some buy-to-open activity at each strike, as FB options traders bet on higher highs for the FAANG stock by week's end.


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