Call Traders Flock to Proctor & Gamble (PG)

09/21/2009 10:45 am EST

Focus: OPTIONS

Nick Perry

Equity Options Trader, Schaeffer's Investment Research

Procter & Gamble (PG) saw an increase in call trading Friday afternoon. Data from WhatsTrading.com reveals that more than 84,500 contracts have changed hands, more than double the stock's average daily trading volume of 41,086 contracts. Furthermore, 77.5% of the volume has changed hands on the call side as the stock has marched more than 3% higher this afternoon.

The September 57.50 call has traded more than 36,500 contracts today on open interest of 26,218 contracts. At 10:51 am eastern time, two large blocks totaling 5,159 contracts changed hands at an ask price of $0.15. At 11:24 am eastern time, two large blocks totaling 4,337 contracts traded at a bid price of $0.15.

Meanwhile, the October 60 call has traded more than 8,472 contracts today on open interest of 20,416 contracts. At 10:35 am eastern time, a block of 1,000 contracts changed hands at an ask price of $0.40, while another 1,000 contracts traded at a bid price of $0.35. In addition, a block of 1,700 contracts traded at an ask price of $0.25 at 10:01 am.

Calls have been the option of choice on PG recently. The International Securities Exchange (ISE) reported two calls purchased for every one put purchased during the past ten trading sessions. This ratio of calls to puts is higher than 86% of all those taken during the past year. What's more, the Schaeffer's put/call open interest ratio rests at 0.55, which is lower than 90% of all those taken during the past year. In other words, options players have been more optimistic toward the shares only 10% of the time during the past 12 months.


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By Nick Perry of Schaeffer’s Trading Floor Blog

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