Oracle options are cheap despite wide popularity
Oracle (NASDAQ:ORCL) stock is buzzing today, after cofounder Larry Ellison canceled a pre-arranged plan to sell $7.5 billion worth of company stock. The shares are down 4.2% to trade at $143.91 and are now down 50.7% year on year, though the 40-day moving average is keeping losses in check.
Options traders are undeterred. Per Schaeffer's Quantitative Analyst Rocky White's list of stocks sporting the most active options over the past two weeks, ORCL saw more than 8 million calls and 3.5 million puts exchanged during this time frame. The most activity was found at the weekly 9/11 325-strike call.
Today is more the same; ORCL has seen 251,000 calls and 156,000 puts cross the tape. The September 160 call is the most active contract, followed by the 155 call in the same series.
Options are relatively affordable at the moment too. This is per ORCL's Schaeffer's Volatility Index (SVI) of 49% stands higher than just 11% of all other readings from the past year, implying that near-term option traders are pricing in relatively low volatility expectations.
It's also worth noting Oracle's Schaeffer's Volatility Scorecard (SVS) sits at a relatively high 99 out of 100, indicating the stock has tended to exceed option traders' volatility expectations during the past year.