The S&P 500 ended its weekly winning streak last week, while the rest of the major market indices finished the week mixed. Call volume held near recent levels on the CBOE, with the exchange’s put/call volume ratio dipping slightly to 0.64; meanwhile, the 10-day moving average rose to another weekly high of 0.59.
As we look for some of the more interesting opportunities this Monday, we’ll look at the top 10 most active stocks in the options pits. That group includes Qualcomm, Inc. (NASDAQ:QCOM), J C Penney Company Inc. (NYSE:JCP) and Hewlett-Packard Company (NYSE:HPQ).
Qualcomm, Inc. (QCOM)
Semiconductor concern Qualcomm is in focus this morning after Samsung Electronics announced this weekend that it’s new Galaxy S6 smartphone would use chips developed in house, rather than using Qualcomm chips. On a more positive note, Qualcomm also unveiled its new a “Cognitive Computing Platform,” Zeroth, a technology designed to anticipate user needs in mobile platforms.
Despite the Samsung news, QCOM stock closed 0.69% higher on Friday. Furthermore, options traders were call heavy on the session, with 77% of the 190,298 contracts trading on QCOM crossing on the call side. Currently, options traders appear to be focusing on deep out-of-the-money puts (likely put sells), and at-the-money calls in the weekly March 6 series.
Heading into the open, QCOM shares are down 0.29% at last check.
J C Penney Company Inc. (JCP)
Shares of mall retailer JCPenney were hammered Friday after the company reported a surprise fourth-quarter loss after the close Thursday. JCP said it lost $59 million, or 19 cents per share, in the quarter, compared to expectations for a profit of 11 cents per share. Revenue rose to $3.89 billion on the quarter, but costly holiday promotions hit the company’s bottom line hard. It was enough for Morgan Stanley to wonder whether JCPenney would make money ever again.
Despite the poor report and abysmal price action, options traders still favored calls over puts on the day. Overall, volume totaled 145,502 contracts on JCP, with 52% of those trading on the call side. Currently, the most popular JCP strikes are the March 9 call, with 22,301 contracts open, and the March $8 call, with open interest of 13,202 contracts.
Technically, JCP is currently perched on potential support at its 10-day moving average.
Hewlett-Packard Company (HPQ)
Like JCP, HPQ was punished last week due to a poorly received fourth-quarter earnings report. The shares plunged more than 10% in the wake of Wednesday’s report, with the stock finishing out the week attempting to gain a foothold in the $34 region. Despite a 2.44% rally Friday, however, HPQ is still trading in short-term oversold territory.
Options traders appeared to be taking their cues from Friday’s rebound, as call volume dominated trading in HPQ options on the session. Of the 103,164 contracts traded, 73% crossed on the call side. Currently, the most popular short-term call for HPQ is the weekly March 6 series $35 call, which sports open interest of 12,513 contracts. This call, which expires at the end of this week, currently rests just out of the money and closed Friday with an ask of 38 cents – meaning that HPQ would only need to rally to $35.38 for these options to hit breakeven.
That said, HPQ is trading flat to lower heading into the open this morning.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
