The major market indices edged slightly higher Monday, as Wall Street rebounded from Friday’s losses despite mixed economic data. On the day, the S&P 500 added 0.2% but still ended well off its recent record highs. Options activity, meanwhile, appeared to settle down from recent volatile activity, with the CBOE put/call volume ratio rising slightly to 0.66, putting the 10-day moving average at a two-week high of 0.64.
Volume among Monday’s most actively traded options was lighter than usual. Apple Inc. (NASDAQ:AAPL) saw activity well below normal — even as the company filed for its first yen-based bond offering. Elsewhere, Gilead Sciences, Inc. (NASDAQ:GILD) was hit with higher-than-normal option volume as the company nears its first dividend payment. Finally, Iamgold Corp (USA) (NYSE:IAG) made a rare appearance in Monday’s most actives list due to falling gold prices and continued reports from a localized event at its Westwood mine in Quebec.
Apple Inc. (AAPL)
While it’s not as sexy as speculation on iPhone sales or music streaming services, Apple’s filing for its first yen-based bond offering was the only real piece of solid news hitting the wire on Monday. With the offering, which matures in 2020, Apple is looking to take advantage of low overseas interest rates and reportedly plans to use the proceeds shareholder returns and expansion in its Japanese operations.
Volume was markedly below average for AAPL stock options on Monday, with only about 551,000 contracts changing on hands on the day, compared to the stock’s daily average of nearly one million contracts traded. Activity was still leaning toward the bullish end of the spectrum, however, with 66% of Monday’s volume trading on the call side.
Among weekly June 5 series options, AAPL options traders are currently focused on the overhead $131 strike, where 29,982 contracts currently reside. That said, the $130 through $135 strikes all sport open interest in excess of 20,000 contracts each, creating a layer of potential options-related resistance for AAPL stock this week.
Gilead Sciences Inc. (GILD)
Dividends are in the mix for GILD stock traders this week, as Gilead Sciences is on course to pay out its first-ever dividend of 43 cents per share later this month. GILD’s ex-dividend date is June 12, so look for options activity to skew heavily toward call volume as this date draws near.
GILD has already been a hot topic for stock traders recently. The shares stagnated for much of the first quarter of 2015, but May was a strong month for GILD, as the company made considerable headway in potential treatments for HIV and hepatitis C.
On the options front, GILD made Monday’s most actives listing with modest volume of 88,257 contracts — a testament to the session’s low volume. Calls were the most popular for GILD, comprising 63% of yesterday’s activity. Look for this figure to rise sharply heading into the June 12 ex-dividend date.
Iamgold Corp. (IAG)
On of the few stocks seeing well above average options volume on Monday, IAG was inundated with volume of 209,190 contracts on the day. While the activity would suggest headline-worthy news from the company or the market at large, it seems that traders are positioning themselves for any fallout resulting from economic data or a potential Fed rate hike. Gold stocks were broadly lower on Monday, despite a weakening U.S. dollar, as metals traders continue to fret over the possibility of higher U.S. interest rates.
As for IAG options activity, puts were all the rage on Monday, accounting for nearly all of the stock’s record short-term volume. Weekly options don’t trade for IAG, but peak June open interest of 10,360 contracts currently rests at the at-the-money $2 put strike. On the call side, the out-of-the-money June $2.50 strike is home to 4,267 contracts.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
