Andrea Kramer and Karee Venema of Schaeffer’s Trading Floor Blog highlight two companies that have recently attracted the attention of call buyers.

Two stocks have recently captured the attention of option traders.

First, call traders have converged on Legg Mason (LM) this week, with option bulls gambling on an extended uptrend for the stock. In afternoon trading on Tuesday alone, LM had seen more than 2,500 calls cross the tape—about 17 times its average intraday call volume, and more than double the number of LM puts exchanged.

On the collective radar is the January 2013 25 strike call, which accounted for more than 1,700 of the contracts traded. Ninety-nine percent of the LEAPS changed hands at the ask price, and volume exceeded open interest at the strike—home to just 175 contracts—pointing to “buy-to-open” activity.

By purchasing the calls to open, the traders are expecting LM to continue its ascent over the next few months. Specifically, the volume-weighted average price of the calls is $2.65, meaning the buyers will profit if LM scales the $27.65 level (strike plus premium paid) by January options expiration.

Here is a recent daily chart:

chart
Click to Enlarge

Today's appetite for calls runs counter to the growing trend seen on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and Nasdaq OMX PHLX (PHLX). In fact, the stock's ten-day put-call volume ratio on the exchanges sits at 0.91—in the 70th percentile of its annual range. In other words, option buyers have scooped up LM puts over calls at a faster-than-usual clip during the past couple of weeks.

However, that skepticism isn't limited to the options pits. Short interest soared 23% during the past month, and now accounts for 6.2% of LM's total available float. At the stock's average daily trading volume, it would take nearly a week to repurchase all of these pessimistic positions. Likewise, just five of the 12 analysts following LM deem it worthy of a "buy" or better rating.

Traders and investors appear to be celebrating a management shake-up at the firm, which said Chief Executive and Chairman Mark R. Fetting will step down on October 1. Lead independent director W. Allen Reed will step into the role of non-executive chairman, while Joseph A. Sullivan, head of global distribution, will become interim chief executive.

Next: McDonald's

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Second, McDonald’s Corp (MCD) option trading has jumped in volume.

Despite a less-than-enthusiastic 9% year-to-date deficit, options players have shown a distinct preference for calls over puts on MCD. Per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and Nasdaq OMX PHLX (PHLX), traders have bought to open 226 calls for every 100 puts in the last 20 sessions.

The trend toward calls is being continued in today's trading. Approximately 20,000 calls have changed hands, representing more than twice the average daily volume for call options. As a point of comparison, around 11,000 puts have changed hands.\

Short-term speculators have set their sights on the October 95 strike call, which has seen more than 3,800 contracts traded. With volume outstripping open interest, and around three-quarters of these contracts going off at the ask price, we can safely assume that new bullish positions are being initiated here.

By buying to open the calls for a volume-weighted average price (VWAP) of $0.51, these speculators are expecting MCD to muscle its way above $95.51 (the strike plus the premium paid) by October expiration. This represents a 4.4% jump from its current perch. However, should MCD fail to cross this mark, the most the traders stand to lose is $0.51 per contract.

Here is a recent daily chart:

chart
Click to Enlarge

It seems speculators have been tending toward near-term calls for some time, as evidenced by the stock's declining Schaeffer's put-call open interest ratio (SOIR).

Since August 20, MCD's SOIR has fallen to 0.84 from 0.92, as call open interest among options expiring in the next three months has increased almost 30%. What's more, this current ratio ranks in the 26th percentile of its annual range, indicating short-term traders are more call-heavy than usual toward the equity.

Even more telling, the stock currently sports a front-month gamma-weighted SOIR of 0.55, showing that near-the-money call open interest almost doubles put open interest among options expiring over the next two weeks. Specifically, a heavy accumulation of call open interest currently resides at the overhead September 92.50 strike. MCD could meet options-related resistance as the nearly 15,300 contracts that rest here begin to unwind.

Additionally, the stock could encounter another overhead ceiling in the near term, this one of the technical variety. Although this morning's well-received same-store sales for August pushed MCD to $92.10—its highest intraday mark since July 20—the equity has pared its earlier gains.

The security is now facing off with its 120-day moving average—a trendline which has contained all daily closes since April 12.

Andrea Kramer and Karee Venema are contributors to Schaeffer’s Trading Floor Blog.