U.S. stock futures are pointing to a positive open Monday morning as Wall Street looks to recover from Friday’s heavy losses. Stocks fell roughly 1.2% across the board Friday, logging their sixth down day in the past eight sessions. Heading into the open, futures on the Nasdaq Composite are up 0.21%, while futures on the Dow Jones Industrial Average have added 0.19%, and the S&P 500 Index was up 0.28%.
Option volume was held well above average on Friday, as General Electric Company (NYSE:GE) and Nov. 13 series expiration spurred considerable activity heading into the weekend. Once again, puts remained at the top of the heap, with the CBOE single-session equity put/call volume ratio vaulting to an eight-week high of 0.98 yesterday, sending the 10-day moving average skipping to a one-month high of 0.73.
Turning toward equity options activity, Facebook Inc. (NASDAQ:FB) saw renewed call activity after the company announced five new publishers for its Instant Article project in India. Elsewhere, Cisco Systems, Inc. (NASDAQ:CSCO) saw heavy fallout from its poor fourth-quarter guidance, with puts gaining in popularity on Friday. Finally, Time Warner Inc. (NYSE:TWC) may be dialing up the pressure on Netflix Inc. (NASDAQ:NFLX) after announcing last week that it may join forces with Netflix’s main competitor, Hulu.
Facebook Inc (FB)
As part of its Instant Article project in India, Facebook announced that it has signed The Quint, Aaj Tak, Hindustan Times, and The Indian Express as partners for the publishing project. The project’s goal is to allow publishers to push content directly to users via Facebook’s network, with better load speeds than traditional methods.
Elsewhere, FB stock was also the target of a bullish research note from Baron Funds, which praised the company’s mobile monetization efforts. On the flip side, SEC filings showed that early Facebook investor Marc Andreessen sold more than 73% of his shares in FB over the past couple of weeks.
Options activity for FB was well above average for the stock. More than 440,000 contracts changed hands on Friday, with calls accounting for 67% of the day’s take. Looking at November options, which expire at the end of this week, traders will want to keep a close watch on the $105 and $107 strike calls, where 27,601 contracts and 14,808 contracts reside, respectively. The $100 strike put is also worth keeping tabs on, as 13,709 contracts are currently open at this key support level for FB stock.
Cisco Systems, Inc. (CSCO)
CSCO stock took heavy fire on Friday, as traders reacted to the company’s poor fourth-quarter guidance. Third-quarter earnings and revenue arrived better than expected, but a weak outlook led Wall Street to worry about growth. Furthermore, a strengthening U.S. dollar was also cited as a potential drawback, forcing some analysts to lower their earnings estimates.
Turning to November options, traders are focused on out-of-the-money call strikes, with the $28 and $30 strikes sporting OI in excess of 21,000 contracts each. Closer to home, there are 10,515 contracts at the in-the-money $26 strike — an area home to key technical support for CSCO stock. Put support is thin in the November series, especially since CSCO is now trading south of peak put OI of 20,579 contracts at the $27 strike.
Netflix, Inc. (NFLX)
Competition may be about to heat up for Netflix, as Time Warner is reportedly on the verge of becoming a considerable investor in Hulu. The move should come as little surprise to NFLX investors, however, especially since the cable industry has been forced to reconsider its ad-heavy programming in recent months due to considerable subscriber losses.
NFLX stock shed nearly 5% following the news, with broad-market selling pressure exacerbating Friday’s losses. Puts were popular on the session, accounting for 54% of the more than 218,000 contracts trading on NFLX. As for November series options, the $100 strike has garnered the most attention, attracting 6,619 calls and 8,206 puts. The $105 strike is also a hotbed of activity this week, with 5,037 calls and 5,696 puts currently open at this overhead strike.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.