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A look at the latest options activity in Microsoft (MSFT), Apple (AAPL), and others
Beth Gaston Moon is the Senior Editor for the Options News Network. Beth was a member of the research department at Schaeffer's Investment Research for more than a decade. ONN’s “Lucky 13″ is our daily listing of 13 equities with the heaviest daily option volume (based on a 20-trading-day rolling average).
Friday’s Notable Option Activity–
Microsoft (MSFT):
Microsoft was a bright spot in Friday’s market, gaining 5.4% to $28.02, hitting a new 52-week high intraday with earnings reported ahead of the opening bell. Implied volatility moved lower with this event out of the way, dropping to $1.47 from $1.84 at Thursday’s close.
The December 30 call was active on the day, with blocks trading midday at 43 cents per contract. Open interest at this out-of-the-money call was just 286 heading into the session, and it looks like some of these options were sold to open, perhaps as part of a buy-write or covered call strategy. The 30 area has been a historical site of technical resistance for the shares (see chart). The November 29 put also saw some new open interest translations on the day, with open interest advancing to 7,074 from 415.
Apple (AAPL):
After stepping to a new all-time high on Wednesday, Apple took a bit of a breather to close out the week, losing 0.61% in Friday’s trading. The December 175 put was in focus, with more than 9,000 contracts trading on open interest of under 5,000. The majority of these contracts translated as new open interest. It looks as though some of this may have been buying activity, even with the stock hovering more than $25 above the strike.
The front-month, at-the-money straddle continues to collapse as volatility moves lower on the heels of earnings. It is now priced at $12.35, down from $13.05 on Thursday.
Bank of America (BAC):
BAC shares dropped almost 2% on Friday to $16.23, closing right on short-term support at its 50-week moving average. The November 17.50 call was active on Friday, with volume boosting open interest by about 15,000 contracts. Shortly after noon Eastern Time, several blocks traded at 28 cents, near the ask price. It is possible these were call buyers, who would need the shares to rally to $17.78 (the strike price plus the premium) by options expiration in four weeks in order to be profitable. This is a move of roughly 9.5 percent. The at-the-money straddle currently stands at $1.44, projecting a move of 8.9% (higher or lower) between now and options expiration.
The ONN Lucky Thirteen: The 13 stocks with the heaviest option volume during the past 20 days.