Traders are targeting in-the-money calls
Options traders are focusing in on cybersecurity stock FireEye Inc (NASDAQ:FEYE) and cloud specialist Box Inc (NYSE:BOX), with notable activity taking place on each in today's trading. We'll take a quick look at how options traders are speculating on FEYE and BOX below.
Starting with FEYE, more than 46,000 calls have traded today, which is almost 10 times the daily average. In fact, calls account for at least the 10 most popular contracts today, with new positions opening at a number of near-term strikes. The most popular overall is the weekly 9/7 15-strike call, where data points to buy-to-open activity. These bulls would be wagering on the stock extending its lead above the $15 level in the coming weeks. Meanwhile, Trade-Alert notes that FireEye is expected to present at two conferences ahead of the expiration date for those weeklies, on Thursday, Sept. 6.
Looking elsewhere, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows call buying was popular even before today. In fact, the stock's 50-day call/put volume ratio is an elevated 5.04, showing a much stronger-than-usual demand for long calls over puts, despite ranking in a lower percentile.
The equity is up 2.6% today at $15.28, set for its first close above the 20-day moving average since July 26. On the other hand, the shares remain in their channel of lower highs and lows that's been in place since peaking near $20 back in April.
Turning to BOX, the stock has also mostly been trending lower in recent months, save a brief burst into the 30s back in June. Today, though, the shares are up 1.5% at $26.07 -- putting them above the 50-day moving average -- and call volume is accelerated. This is mostly due to heavy trading at the December 26 call, where new positions are being opened in hopes of the equity rising further above $26 in the months ahead.
Like FEYE, Box call buying has dominated put buying at the ISE, CBOE, and PHLX, as the 10-day call/put volume ratio resides up at 9.27. Anyone buying options today are dealing with elevated premiums, however. That's according to the stock's 30-day at-the-money implied volatility, which at 56.5% stands in the 97th annual percentile. In other words, volatility expectations for short-term options are unusually high right now. Looking ahead, the company will report earnings after the close on Tuesday, Aug. 28.
