October expiration is coming and here is a look at three popular high beta stocks that often pin within there open interest range. Monthlies are more popular than weeklies so the numbers are much higher. Keep in mind that many people probably bought these calls and puts a long time ago as opposed to within just a few days as with weekly options.
GOOG reports earnings this Thursday. The OI call at 800 will be very hard to get over. Currently the asking price for the 800 call strike is $3.10. With the increase in volatility and a possible run up, selling premium at the 800 strike might be a good risk/reward tactic. I will be updating the OI of GOOG via twitter as Thursday gets closer.
Also, GOOG has had a monster run. Below is a chart of the downfall that GOOG had in 2007 after it made such a steep run and an all time high. It doesn’t mean GOOG can’t continue to go higher and in fact many technical analyst have predicted that GOOG will get to 800 by the end of the year. It’s always good to keep yourself open to all different scenarios that could play out.
Although the highest call OI is at 750, close behind it is the 700 strike. The former strike was likely bought up a while ago since monthly options are available far in advance. Since weekly AAPL options are so popular, the OI will likely have drastic changes between now and Friday. AAPL tends to run up into earnings and earnings are set for Thursday October 25th. Having said that, if you follow technical principles or at least follow those who post many updates on AAPL, you will know that AAPL’s chart currently needs some work.
I also wanted to point out that if you take a step back and look at the broader picture in relation to AAPL, our current correction is very minor. Also, since March 2009, AAPL has never had more than two down months in a row as shown below.
Currently 640 is the highest call OI with not much matching it’s size on the put side. PCLN has been very choppy as of late as you can see in the daily chart below. After its major drop on earnings in August it began to regain some relative strength; however, the overall market was also in an uptrend . Currently PCLN doesn’t appear to have the strength to move up in our overall corrective mode.
Throughout the week I will be posting more charts of open Interest on twitter. Use them to help you determine ranges for a possible pin on Friday. However, remain attentive to the overall market condition as well as earnings announcements that break any presumptions you may have.