Puts Popular as Tariff Tensions Jolt FCAU Stock

Put volume is two times the average intraday amount today

by Patrick Martin

Published on Apr 4, 2018 at 2:47 PM
Updated on Jun 24, 2020 at 10:16 AM

Automobile stock Fiat Chrysler Automobiles NV (NYSE:FCAU), like these sector peers, has experienced erratic price action today as the U.S. and China exchange trade blows. At last check, FCAU was up 0.3% at $21.85, but that hasn't stopped options traders from targeting puts.

Taking a closer look, roughly 4,300 FCAU options have changed hands today, two times the average intraday volume and ranking in the 93rd percentile of its annual range. New positions are being opened at a number of near-term contracts in the April series, but the most popular overall is the September 21 put, with nearly 2,600 contracts exchanged.

Data suggests a mix of buy- and sell-to-open activity at the long-term contract today. Those buying the put expect the shares to fall back below $21 in the months ahead, while put writers expect this price point to hold as technical support.

Taking a step back, however, shows a different story compared to today's options activity. The security has a 10-day call/put volume ratio of 6.73 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This shows that calls have outnumbered puts by a more than six-to-one ratio in the past two weeks.

Echoing this, FCAU stock's Schaeffer's put/call open interest ratio (SOIR) of 0.29 is in just the 6th percentile of its annual range, revealing that short-term traders are more call-heavy than usual right now.

On the charts, Fiat Chrysler stock notched a record high of $24.95 on Jan. 25, before pulling back to its supportive 80-day moving average. The equity has tacked on 111% year-over-year, including a 22.6% jump already in 2018. 


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