Wednesday’s Vital Data: Verizon, Tilray and Square

U.S. stock futures are inching higher this morning as buyers continue to press their advantage. Ahead of the bell, futures on the Dow Jones Industrial Average are up 0.51% and S&P 500 futures are higher by 0.42%. Nasdaq-100 futures have added 0.53%.

In the options pits, call volume followed the usual script — outpacing puts by a modest margin. Specifically, about 18.7 million calls and 15 million puts changed hands on the session.

At the CBOE, the single-session equity put/call volume ticked higher to 0.63. Meanwhile, the 10-day moving average fell to a new two-month low at 0.64.

Here were three key stocks atop Wednesday’s most-active list. Verizon (NYSE:VZ) saw renewed options interest after reporting strong Q4 metrics. Tilray (NASDAQ:TLRY) benefited from an optimistic analyst note. Finally, Square (NYSE:SQ) saw above-average activity as the stock notched its third up day in a row.

Let’s take a closer look:

Verizon (VZ)

The rebound in Verizon hit its stride yesterday with a powerful breakout through the 50-day moving average on above-average volume. With the rally, VZ stock now sits a stone’s throw from record highs, and its uptrend has arguably been re-established.

Investors cheered the telecommunication giants freshly released Q4 metrics included better-than-expected customer loyalty rates.

Another reason why options were such a hot commodity is Wednesday’s ex-dividend date. Shareholders of record will qualify for the quarterly dividend payout of 60 cents which translates to an annual yield of 4.17%.

On the options trading front, call volume experienced its quarterly explosion. Total activity rocketed to a whopping 1,160% of the average daily volume, with 412,006 total contracts traded. 92% of the trading came from call options alone as traders sought ownership of the stock to qualify for the dividend payout.

Implied volatility slipped lower on the day to 24%, placing it at the 47th percentile of its one-year range. Premiums are now pricing in daily moves of 89 cents or 1.5%.

Tilray (TLRY)

You know speculative behavior is returning to the marketplace when marijuana stock Tilray lands on the top gainer’s list. Shares of the Canadian-based company jumped 15.8% higher amid strong volume after a Cowen analyst penned a bullish note to clients about the potential for Tilray and Canopy Growth (NYSE:CGC) to deliver strong performance in 2019.

Recently, TLRY has been drifting sideways with little momentum in either direction, so the news is bringing a much-needed boost and directional clarity. With the stock still below a descending 50-day moving average, however, more work remains before the trend completes its turn higher.

On the options trading front, calls dominated the session. Total activity swelled to 284% of the average daily volume, with 87,006 total contracts traded. Calls accounted for 67% of the day’s take.

The increased demand drove implied volatility higher on the day to 136%.

Square (SQ)

With little news to speak of, Square’s addition to the most-active options list yesterday was likely driven by investor optimism surrounding its rebound. Square shares rallied for a third day in a row bringing the total recovery off of Decembers lows to a 27% gain.

But the coast is not clear — multiple overhead resistance levels loom, including the descending trendline that has defined the three-month decline as well as the 50-day and 200-day moving averages.

On the options trading front, calls were the winners of the day. Total activity climbed to 143% of the average daily volume, with 134,046 total contracts traded. Calls added 68% to the session’s take.

The stock’s rally continues to bring implied volatility down from its panic-induced heights. It now stands at 64%, or the 52nd percentile of its one-year range. Premiums are pricing in daily moves of $2.55 or 4%.

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.

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