Weekly Call Options Hot as Micron, GE Stocks Push Higher

General Electric is set for its highest settlement in two months

May 21, 2018 at 11:40 AM
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Schaeffer's Senior Quantitative Analyst Rocky White compiled a list of the 20 stocks that saw the heaviest options volume over the past 10 days, with names in yellow new to the list since the last time the study was run. Two stocks worth taking a closer look at today are Micron Technology, Inc. (NASDAQ:MU) and General Electric (NYSE:GE), as both make strong moves to the upside.

stocks with most traded options

Micron Options Traders Target $52.50 Level

MU shares are trading up 4.6% today at $55.85, after the chipmaker upwardly revised its current-quarter outlook at its investor meeting. The equity has been strong since bouncing from the $45 level earlier this month, but remains below the $57 level that acted as a ceiling last week and coincides with a mid-March bull gap. This price point also represents a 10% pullback from Micron's multi-year peak of $63.42 from March 13.

As for options traders, sentiment has been mixed in recent weeks. The June 52.50 put saw the largest increase in open interest during the past 10 days, and data shows a mix of buy- and sell-to-open activity. The June 52.50 call also saw a significant increase in open interest during this time, and most positions there were bought to open. It should be noted that the stock's 50-day moving average sits right at this strike.

In today's trading, calls are crossing at nearly twice the expected rate. Most popular overall is the weekly 5/25 56-strike call, where new positions are being opened. If these calls are being bought, traders would be wagering on more upside from MU shares through the end of this week, when the contracts expire.

Call Buyers Jump on GE Stock Rally

Blue chip GE, meanwhile, is rallying on news the company will merge its transportation business with Wabtec (WAB), in a deal valued at just over $11 billion. General Electric is trading up 3.4% at $15.47 as a result, on pace for its best close since Feb. 2, and its first above the 100-day moving average in over a year.

Call buying has been popular on the Dow component in recent weeks, based on its 10-day call/put volume ratio of 2.41 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The July 17 call saw one of the largest increases in open interest during this time, and data points to mostly buy-to-open activity here.

Call options are again popular today, with volume currently pacing for the 94th annual percentile. Buy-to-open activity looks to be taking place at the weekly 5/25 15.50-strike call, suggesting bulls see more upside for GE stock by Friday's close.

 

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