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What's Hot!
OptionsHouse investment specialists Steve Claussen and George Ruhana give you a look at what's hot in the world of options. Get the inside scoop on which options are the hottest, and which ones are beginning to cool down.
An update on Google (GOOG) and a look at the latest potential takeover target
Option traders – the markets are actually lower this morning! Whats up with that? I’m Steve Claussen, Chief Investment Strategist for OptionsHouse … here’s a look at What’s Hot for Thursday, March 11th.
Continued concerns about inflationary pressure in China are keeping stocks just below breakeven this morning. Closer to home, the weekly jobless claims declined week on week to 462K, but that was less than economists were hoping. In late-morning trading, the markets are battling back from early losses, the Dow and the SPX are now barely lower and the Nasdaq has actually scraped back – barely into the black.
The VIX has quietly risen again, and now this implied vol measure is back close to the 19% level. Remember this indicator of demand for options recorded a low of under 17.25 just last Friday. To me this may be indicating that people are a touch nervous about this months gains.
Today on to the OptionsHouseHotlist!
Google (NASDAQ: GOOG) is leading the pack today with more than 70,000 contracts on the tape. The company is all over the news today … Broadpoint AmTech research division said that Google’s gross margin could rise substantially over the next two years… cities are lobbying to become a trial market for Google’s ultra high-speed broadband network, and a new virtual business services shop was opened. The shares are subsequently outperforming their tech peers, up about 1.3 percent so far today. Options volume is scattered across dozens of calls and puts, but the most popular strikes today are the March 580 call and the March 600 call, both of which have seen about 7,000 contracts change hands.
I know this is getting old and at the risk of sounding like a broken record, we have another rumored takeover candidate – Ultra Petroleum Corp (NYSE: UPL). Chevron may have its eye on making a play here. The stock hit our hotlist with more than 15 thousand contracts trading. More than 10 thousand of these contracts have traded collectively in the March 49, March 50, strikes as well as the April 55 calls. To me it looks like these likely call buyers are scooping bullish positions in hopes that the takeover rumors become reality — and soon! Call buyers can lose 100 percent of what they pay for the options, but have unlimited upside if UPL rallies above the purchased strike. UPL stock is up about one percent today at $48.50.
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