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Weeklies dominate nervous trading

Posted
3/18/2013 1:20:00 PM
By: optionMONSTER
Referenced Stocks:KORS

News from Cyprus rattled the markets today, and traders are using short-term weekly options to stay nimble.

optionMONSTER's Heat Seeker monitoring program detected unusual activity in companies such as ConocoPhillips, Anadarko Petroleum, and Michael Kors. Volume focused on contracts expiring this Friday, letting investors profit from short-term rallies, while also limiting their losses if panic intensifies in the broader market.

KORS was the first to grab attention with more than 4,500 of its 57.50 Weekly calls purchased for $0.75 to $1. Minutes later, attention turned to the APC 85 Weekly calls, where more than 6,000 contracts were bought mostly for $1.30.

Then the biggest volume hit in COP, where traders snapped up more than 20,000 Weekly 60 calls. Most of the contracts priced for $0.16 to $0.21. Those COP calls have already more than tripled from their initial prints for $0.07, which illustrates the leverage potential of weekly options.

Apple, another long-time favorite of short-term traders, is also seeing bullish activity. Its 450 Weekly calls have changed hands almost 21,000 times, making them the top contract on our proprietary Trading Weeklies page. The AAPL 460s, 445s, and 455s are also active.

Weekly options have grown increasingly popular in the last two years as investors use the instruments to play short-term moves in some of the market's most popular companies. Despite representing less than 2 percent of all the contracts in the market, they account for almost 18 percent of today's volume, according to optionMONSTER data.