Options Activity for ATVI, DISH and WFC
Monday, August 23, 2010



I hope that your trading is going well, as I know that members of S.O.M.E. are making the most of the market movements and their returns.



Today's information includes a look at a rise in call trading on Activision Blizzard (ATVI), an uncharacteristic jump in call trading on Dish Network (DISH), and a rise in put trading on Wells Fargo & Co. (WFC). Activision Blizzard (ATVI) Options trading was brisk on Activision Blizzard Inc. (ATVI) on Friday, as more than 59,500 contracts crossed the tape. This surge in volume was roughly eight times the stock's average daily trading volume of 7,221 contracts, according to data from WhatsTrading.com.



Options players have favored calls on the stock recently. The International Securities Exchange (ISE) has reported 4.4 calls bought to open for every one put purchased to open during the past 10 trading sessions. This ratio of calls to puts is higher than 64% of all those taken during the past 12 months, pointing to a growing optimism.

In fact, the put/call open interest ratio (SOIR) comes in at 0.56, as call open interest nearly doubles put open interest among options slated to expire in less than three months. This ratio of puts to calls is lower than 82% of all those taken during the past year. In other words, short-term options players have been more optimistically aligned toward the shares only 18% of the time during the past 12 months.

Elsewhere, we find that Wall Street is also optimistic. According to Zacks, the stock has earned 23 "buy" ratings and one "hold." This configuration leaves the security vulnerable to potential downgrades should the security remain trapped in its current trading range.

Technically speaking, the shares of ATVI are relatively flat on the year. The security has settled into a sideways trading range between resistance in the 12.50 to 13 region and support at the 10 level. The stock has been trapped in this range since October 2009.



Dish Network (DISH)

Dish Network Corp. (DISH) was the center of some heavy options trading on Friday, as more than 61,500 contracts changed hands. This jump in activity was more than 27 times the stock's average daily trading volume of 2,297 contracts, according to data from WhatsTrading.com. In addition, approximately 65% of the volume crossed the tape on the call side.



Despite Friday's preference for calls, options players on the ISE have recently preferred puts. During the past two trading weeks, more than two puts have been purchased to open for every one call purchased to open. This ratio of puts to calls is higher than 90% of all those taken during the past 12 months.

Furthermore, the SOIR for DISH comes in at 1.02, as put open interest outnumbers call open interest among options slated to expire in less than three months. This ratio of puts to calls is higher than 77% of all those taken during the past 12 months. In other words, short-term options players have been more pessimistically aligned toward the shares only 23% of the time during the past 52 weeks.

On the other hand, Wall Street still remains optimistic when its comes to the security. According to Zacks, the stock has earned 11 "buy" ratings and six "holds." There is ample room for potential downgrades, which could spell trouble for the shares.

From a technical perspective, the shares of DISH are starting to break down, as the equity has declined nearly 14% since the beginning of the year. The equity staged a solid rally along the support of its 10-week and 20-week moving averages, but since reaching a peak in the 24 region, the stock has rolled over below these trendlines, which are now serving as layers of resistance.



Wells Fargo & Co. (WFC) Options traders were focused on Wells Fargo & Co. (WFC) on Friday, as more than 214,400 contracts changed hands. This surge in volume was more than five times the stock's average daily trading volume of 43,972 contracts, according to data from WhatsTrading.com. Furthermore, traders were feeling bearish, as roughly 87% of the volume changed hands on the put side.



The ISE has seen a jump in put trading recently. During the past two trading weeks, 1.4 puts have been purchased to open for every one call purchased to open. This ratio of puts to calls is higher than 62% of all those taken during the past year.

However, the SOIR for WFC comes in at 1.16, which is lower than 61% of all those taken during the past year. In other words, short-term options speculators have been more optimistically aligned toward the shares only 39% of the time during the past 12 months.

Finally, we find that Wall Street is smitten with the shares. According to Zacks, the stock has earned 18 "buy" ratings, four "holds," and three "sells."

Technically speaking, the shares of WFC are down more than 8% since the beginning of the year. The equity has retreated under resistance at its 10-week and 20-week moving averages since the beginning of May, and has now fallen below former support at the 25 level.





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