Schaeffer's Trading Floor Blog

Options Check-Up: Amazon.com, Inc., Take-Two Interactive Software, Inc., and Yelp Inc

Analyzing recent option activity for AMZN, TTWO, and YELP

by 2/3/2014 6:38 PM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are online retailer Amazon.com, Inc. (NASDAQ:AMZN) , video game developer Take-Two Interactive Software, Inc. (NASDAQ:TTWO) , and online review pioneer Yelp Inc (NYSE:YELP) . Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on AMZN, TTWO, and YELP.

  • AMZN is down 13.2% year-to-date to trade at $346.15, mostly due to last Thursday's poorly received earnings report. Nevertheless, speculators at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open calls over puts at an accelerated pace during the past two weeks, as the stock's 10-day call/put volume ratio of 1.24 at these exchanges is just 12 percentage points short of a 12-month peak. Short-term options on Amazon.com, Inc. are relatively cheap, from a volatility perspective, with the equity's Schaeffer's Volatility Index (SVI) of 29% sitting lower than 69% of similar readings from the past year.


  • Heading into tonight's mixed fiscal third-quarter earnings report, TTWO speculators were picking up puts, relative to calls, at a faster-than-usual rate. This is evidenced by the fact that the equity's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.42 stands in the 85th percentile of its 12-month range. Considering Take-Two Interactive Software, Inc.'s SVI of 52% ranks in the 68th annual percentile, short-term option traders are paying a bit more for the contracts. Meanwhile, on the charts, TTWO boasts a year-over-year gain of 47.9% to perch at $18.90, after earlier tagging a multi-year high of $19.67. In after-hours trading, TTWO is slightly lower.


  • YELP's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.75 ranks higher than 82% of comparable readings from the past year, indicating long puts have been in higher demand than usual, relative to long calls, leading up to the company's fourth-quarter earnings release after Wednesday's close. Considering the equity -- perched at $74.49 -- has tacked on almost 264% year-over-year, these bearish bettors may hit the exits in the near term, especially if YELP posts upbeat quarterly results. Of note, speculators are willing to pay a pretty penny for Yelp Inc's short-term options, given that the stock's SVI of 91% sits in the 82nd annual percentile.

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