A fourth consecutive weekly gain could be on tap for the major market indices today, but options traders appeared to fret about short-term weakness Thursday. Call volume continued to falter on the CBOE, with the exchange’s put/call volume ratio rising once again to perch at 0.65. The 10-day moving average rests at 0.58 — a weekly high.
Among the top 10 most active stocks in the options pits were Apple Inc. (NASDAQ:AAPL), Tesla Motors Inc (NASDAQ:TSLA), and Facebook Inc (NASDAQ:FB). Let’s see what we can take out of these bundles of contracts.
Apple Inc. (AAPL)
The next big thing for Apple Inc. was hinted at on Thursday, when the company sent out invitations to an event on March 9 in San Francisco. The company is expected to release details for the Apple Watch, according to reports. Additionally, unfounded rumors are circulating about a potential collaboration with Tesla Motors.
AAPL stock continues to be the most active in the options pits, with nearly 1.9 million contracts traded Thursday. What’s more, 64% of those contracts traded on the call side of the tape.
There is reason for this bullish sentiment, as Apple stock tagged a post-split high earlier this week. While the shares have pulled back from this high, AAPL appears to be forming a base in the $130 region — a technical development the bodes well for the stock’s short-term outlook.
Tesla Motors Inc (TSLA)
Apple collaboration rumors helped drive Tesla stock nearly 2% higher on Thursday. TSLA stock was due for some positive news since the shares have been beaten lower in the wake of disappointing quarterly earnings results. The rumors, which reportedly originated on a Chinese website, remain unsubstantiated, but this hasn’t stopped speculation from driving trading activity on Tesla stock.
In the options pits, this speculation translated into heavy volume, with more than 145,000 contracts changing hands. The activity had a slight bullish lean, with 58% of option contracts traded crossing on the call side. TSLA options traders should expect to see heavy activity in the weekly March 6 series today, as a wealth of weekly Feb. 27 series options expire at the close.
Facebook Inc (FB)
Despite a lack of significant headline news, shares of Facebook have attracted considerable attention in the options pits this past week. On Thursday, the stock saw volume of 371,406 contracts change hands, with a healthy 73% of those trading as call options. The most active strikes have been the $80 and $85 in the weekly March 6 series of options, sporting open interest of 7,394 contracts and 3,762 contracts, respectively.
The heavy focus on the $80 strike hints that this activity might be technical in nature. The $80 level has been a spot of overhead resistance for FB stock, and a solid breach of this region could lead to additional gains over the short-term. FB closed above $80 yesterday, following a 1% gain on the day, and the shares are trading up marginally in pre-open activity this morning in the $80.50 region.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
