Friday’s slide into the weekend carried over into Monday morning, as the major market indices started the week on a down note. Despite the poor overall performance by stocks, though, call options were quite popular on the day, with the CBOE put/call ratio plunging to a two-week low of 0.41.
Among the top 10 most active stocks in the options pits were Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Bank of America Corp (NYSE:BAC).
Apple Inc. (AAPL)
Apple stock has maintained its perch at the top of our top 10 most active options listing for the past two weeks, with calls dominating the landscape. On Monday, 60% of the 627,097 contracts trading on AAPL stock crossed on the call side, with most of that volume trading in the weekly Feb. 13 series of options.
Overall, AAPL’s February/March put/call open interest ratio has plunged to a reading of 0.62, below roughly 80% of all such readings taken in the past year.
Helping to drive Monday’s wealth of call volume, speculation emerged that Apple could launch a refreshed MacBook Air at an event on Feb. 24. Additionally, analysts at Canaccord Genuity reiterated their “buy” rating on AAPL stock, while raising their price target to $145 from $135.
Microsoft Corporation (MSFT)
Microsoft saw a veritable flood of call volume on Monday, with some 82% of the 211,895 contracts trading on MSFT stock crossing on the call side. Most of this activity appears to have taken place in the April series of options, though some 1,200 contracts traded at the March $44.50 strike on open interest of 107 contracts, hinting that this volume was the initiation of a fresh position. With MSFT closing at $42.36 on Monday, these contracts are more than $2 out of the money.
Headline news for MSFT stock was sparse, with only news of an upsized debt offering grabbing any notice. Specifically, Bloomberg reported that Microsoft increased its $7 billion debt offering to $10.75 billion due to strong demand, making it the largest debt sale in Microsoft’s history.
Bank of America Corp (BAC)
While they were not as popular as Microsoft’s, Bank of America’s calls also were active Monday. BAC stock saw 64% of the 173,379 contracts crossing the tape change hands on the call side. Despite the recent attention to call options, BAC’s February/March put/call ratio has rebounded from last month’s annual low to a perch at 0.61 in the 25th percentile of its annual range.
After rallying Friday on hopes that the Fed would have to raise short-term rates soon, BAC stock faltered Monday. That said, the shares remain north of key support at $16 and their 200-day moving average.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
