Unusual Options Activity For June 23rd

view original post

When a stock experiences unusual option volume, it can indicate large traders making a big bet on the direction of that stock. Unusual option volume is generally referring to activity in a specific option contract or group of contracts that is much higher than the usual daily volume.

When looking for unusual options activity, most trader look for volume that is:

  • At least 5 times higher than average
  • Short term (less than 30 days to expiration)
  • Far out-of-the-money

Another way to spot unusual activity is to look for volume that is much higher than the open interest in that contract. This can indicate a new trade being placed, rather than a closing out of an existing position.

Unusual Stock Options Activity Screener

At Barchart, we have an excellent screener for unusual options activity. The screener identifies options contracts that are trading at a higher volume relative to the contract’s open interest. 

Unusual options can provide insight on what “smart money” is doing with large volume orders, signalling new positions and potentially a big move in the underlying asset. 

When the last price is at or above the ask price the strike price is highlighted in green; when the last price is at or below the bid price the strike price is highlighted in red.

If you would like more details on how to use this screener, you can watch this video.

Let’s take a look at the screener for June 23rd:

Some large cap names on the list include Altria (MO), British Petroleum (BP), Bristol-Myers Squibb (BMY), PayPal (PYPL), Walgreens (WAG), Wells Fargo (WFC), Shopify (SHOP), Coinbase (COIN), Meta Platforms (META) and Tesla (TSLA).

Let’s take a look at the eighth line item, the 81 strike July 15th call option on BMY. This call option traded 5,310 contracts which is far great than the open interest of 109. 

The Barchart Technical Opinion rating is a 72% Buy with a Average short term outlook on maintaining the current direction. Long term indicators fully support a continuation of the trend.

Bristol-Myers Squibb is a one of the leading global specialty biopharmaceutical companies focused on the development of treatments targeting serious diseases like cancer, inflammatory, immunologic, cardiovascular or fibrotic diseases. Backed by its blockbuster immuno-oncology drug, Opdivo, Bristol-Myers has a strong oncology portfolio, comprising other drugs like Revlimid, Pomalyst, Sprycel, Yervoy and Empliciti. It also has important immunology and cardiovascular drugs like Orencia and Eliquis. It’s experiencing growth in both the Eliquis brand and the market, while also advancing its Factor XIa inhibitor program. After the sale of the global Diabetes business to AstraZeneca and the discontinuation of discovery research efforts in virology, it’s focusing solely on research in core therapeutic areas like oncology, immuno-oncology, immunoscience, cardiovascular, fibrosis and genetically defined diseases. It acquried Celgene Corporation and MyoKardia. It received regulatory approvals for Reblozyl and Inrebic.

Unusual Call Option Activity in Alibaba

Scrolling down the list, there was also some large volume in the Alibaba (BABA) 104 calls with a July 15th expiration. This call option traded 1,202 contracts which is more than the open interest of 102. This contract was traded at or above the ask price, as indicated by the green color of the strike price.

The Barchart Technical Opinion rating is a 24% Sell with a weakest short term outlook on maintaining the current direction. Long term indicators fully support a continuation of the trend.

Alibaba Group Holding is one of the leading e-commerce giants in China. Over the last few years, the company has transformed itself from being a traditional e-commerce company to a conglomerate that has businesses ranging from logistics and food delivery to cloud computing. Alibaba Group is represented by three businesses’ Alibaba.com, Taobao, and Tmall. The company’s businesses account for more than half of all online retail sales in China, which is one of the world’s fastest-growing e-commerce markets. Taobao is one of Alibaba Group’s most profitable marketplaces that generates for more than 80% of its sales, thanks to soaring demand for high-quality imported brands in China.The company is well positioned in the New Retail space. In this space, it aims to bring together digital payments, e-commerce, food delivery and other parts of the business into one big ecosystem. The ubiquity of smartphones and evolution of physical and online commerce are helping the company to gain momentum in this space.

Options Change In Open Interest

The Options Change In Open Interest is another interesting report that can be used to spot unusual options activity.

Here we can see there were large changes in the July 95 call options on Disney (DIS) and also the Wells Fargo 40 strike calls amongst others.

You can also flip the screener from Stocks to ETF’s:

Please remember that options are risky, and investors can lose 100% of their investment. This article is for education purposes only and not a trade recommendation. Remember to always do your own due diligence and consult your financial advisor before making any investment decisions.

*Disclaimer: On the date of publication, Steven Baster did not have (either directly or indirectly) positions in some of the securities mentioned in this article. All information and data in this article is solely for informational purposes. Data as of after-hours, June 23, 2022.

More Options News from Barchart