U.S. stock futures are largely unchanged this morning following a quiet overnight trading session. News remains light this morning with the ongoing government shutdown continuing to dominate the discussion.
Ahead of the bell, futures on the Dow Jones Industrial Average are down 0.1% and S&P 500 futures are lower by 0.01%. Nasdaq-100 futures have added 0.31%.
In the options pits, call and put activity were balanced as overall volume remained near average levels. Specifically, about 15.3 million calls and 16 million puts changed hands on the session.
Over at the CBOE, little changed versus Tuesday’s trading session. The single-session equity put/call volume ratio closed at 0.64 for the second day in a row. Meanwhile, the 10-day moving average held firm at 0.63.
Here were three stocks atop the most-actives list. Proctor & Gamble (NYSE:PG) shares jumped following better-than-expected earnings. Cisco (NASDAQ:CSCO) calls were hot after the stock broke above its 50-day moving average. Finally, Intel (NASDAQ:INTC) options were active ahead its report after the closing bell.
Let’s take a closer look:
Proctor & Gamble (PG)
Proctor & Gamble reacted to its quarterly earnings report with a solid 4.9% gain yesterday. The consumer staples giant tested its previous peak and all-time high intraday before paring gains into the close. PG earned $1.25 per share compared to analyst estimates of $1.22.
The price action of PG has been admirable during the broader market’s recent rout. And the strength has come despite the entire consumer staples sector getting dragged lower with everything else. While its industry and the S&P 500 remain well off their respective highs, PG is now a stone’s throw from record territory.
On the options trading front, calls won the day. Total activity swelled to 489% of the average daily volume, with 90,445 total contracts traded. Calls contributed 68% to the day’s tally.
With the uncertainty of earnings now past, implied volatility sunk like a stone to 19%, which places it at the 28th percentile of its one-year range. Premiums are now pricing in daily moves of $1.12, or 1.2%.
Cisco (CSCO)
Though all was quiet on the news front, Cisco stock’s pop above the 50-day moving average on Wednesday lit a fire in the options market. For most of 2018, CSCO was rangebound, giving little inspiration to trend traders. Thus far this year the chop continues, but yesterday’s clearing of the 50-day does set the table for a potential run back to the upper end of the range near $49.
On the options trading front, calls were all the rage. Total activity rocketed to 263% of the average daily volume, with 104,636 total contracts traded. 85% of the trading came from call options.
Implied volatility ticked higher to 31%, placing it at the 55th percentile of the one-year range. Premiums are now pricing in daily moves of 90, cents or 2%.
Intel (INTC)
Intel is slated to release earnings after the close on Thursday and options activity is surging in anticipation. Shareholders are hoping the quarterly report will be the catalyst to finally push INTC stock out of the box it’s been stuck in for six months. A break above the 200-day moving average and the heavy horizontal resistance zone at $50 would kickstart a new uptrend.
On the options trading front, calls dominated the session despite the down day. Total activity grew to 180% of the average daily volume, with 137,564 total contracts traded. Calls added 77% to the day’s take.
The options market provides a glimpse into market expectations for how much Intel should shift after earnings. Right now, option premiums are baking in a $2.02, or 4.2%, move. Regardless of how things shake out tomorrow, I see little reason to get bullish or bearish on INTC until it takes out $50 or $43.
As of this writing, Tyler Craig didn’t hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility.
