Trading European Volatility: The Options Market's Top 8 European Stock Picks

Facing complete economic collapse, Ireland finally swallowed its Celtic pride and lodged a formal request for international aid. No real surprises there -- it's been more a matter of when than if the beleaguered nation would accept the handout it needed to stabilize its banking system and get cheaper funding.

The size of the loan package has yet to be determined, but speculation puts it in the ballpark of 80 to 90 billion euro, by no means small potatoes. And it's the second rescue package this year for a eurozone country.

So what does Ireland's bailout import for the future of European equities? A quick survey of analysts suggests that there's no real consensus among the experts.

For Luke Stellini of Invesco Perpetual, the success of Ireland's aid package is certainly important -- but more than anything, it's containment that's key to the health of the market.

As long as the problem doesn't spread to larger European economies, equities should be fine, according to Stellini.

He explains: "Recent history proves this with European equities performing well despite the widening in spreads between Irish and German bond yields." And what's more, "divergent performance between peripheral European markets also highlight the belief the risk of contagion has diminished."

Tom Beevers, investment manager at Newton, isn't too concerned either, and in fact, believes that core Europe is actually seeing upside from concerns around Ireland, owing to a weakened euro: "With QE in full swing in the U.S. and other countries intervening to keep their currencies weak, it is clear the euro would have been stronger in the absence of such concerns." And for the export-reliant countries comprising the continent's backbone, a lower exchange rate is actually a good thing.

But there's a strong faction of analysts that believes the bailout's success is absolutely critical to the equities market.

Daniel Pasini of ACPI investments argues that failure would mean that "the value of the Irish bank debt, which is broadly held in German, French, and other European countries banks and insurances will collapse even more" and "imply the need of new capital for European banks, and major hits to book value of insurance companies."

It's impossible to know how things will pan out, but we can try to search for clues in the meantime. So we wondered, what do options traders think of the outlook for European equities?

To find out, we collected options data for all European stocks listed on U.S. markets. When a stock has a large number of call options relative to put options, it means that it's generating bullish sentiment in the options market. (Click here to access free, interactive tools to analyze these ideas.)

Here's a list of eight European stocks seeing the most bullish options sentiment. Options data sourced from Schaeffer's. The list has been sorted by the put/call ratio.

Interactive Chart: Press Play to see how analyst ratings have changed over the past two years.

Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.